Which loans can I consolidate? You can consolidate pretty much all kinds of federal student loans like Subsidized and unsubsidized Stafford Loans, PLUS Loans, and Perkins Loans, Including most federal loans in default. But endure careful–defaulted Direct Consolidation Loans can not be reconsolidated, so you only get one chance to use consolidation to get out of default.
When consolidation does make sense? Consolidation might make sense if:
- You desire to combine your federal loans and the make just one monthly payment.
- You desire to lock in a fixed interest rate on variable interest rate loans (Borrowed Reviews those before 2006).
- You involve a way out of default.
- You have the Federal Family Education Loans, or FFEL (federal loans from a bank or private lenders like Sallie Mae) and you want Reviews those federal student loans to be eligible for Public Service Loan Forgiveness (since only Direct Loans are eligible).
How can consolidation get me out of default? If you’re in default on your student loans, you can non get new loans to transcend away back to school, and you face severe collection procedures. Consolidation can give you a fresh start. You can consolidate defaulted student loans into a Direct Consolidation Loan and stop garnishments and tax collections Including intercepts. Be aware that if you are in default, your balance will go up after you consolidate, Because collection fees will be added to the loan.
Now, the query is? Can I consolidate my private student loans into a Direct Consolidation Loan? I wish. Unfortunately, private loans are not eligible for consolidation into a Direct Consolidation Loan. And, for Pete’s sake, beware of consolidating your federal loans into a private consolidation loan. Federal loans have important borrower protections that you lose if you choose to consolidate federal loans with a private lender. Also, federal consolidation loans have lower interest rates Generally. Only Federal Direct Loans offer consolidation loans These Days.