If you are looking for information on federal student loan consolidation then chances are that you just graduated. so congrats!! Anyways, federal student loan consolidation is an option that millions of students have taken in order to group their payments into one lump payment. This method can is essentially a way to reduce your monthly payments by extending your repayment period. Being that federal studentl loan consolidation is different than private loan conoslidation, the follwing information will go into detail aboue the beneficial aspects that come out of it as well as the negatives that come with it.
Federal Student Loan Consolidation – Benefits
- By reducing your monthly payment rate by anywhere up to 50 perecent or more, you will be able to afford payments a lot easier meaning you will be able to increase your credit score.
- For federal student loan consolidation, no matter what company you are using, you will not have provide a good credit score or a cosigner with a credit score to get accpeted because federal student loan consolidation is not based on your credit.
- Federal Student Loan Consolidation as said above allows you to group your payments into one payment meaning that you only have to pay to one lender each month as well as only having to call one resource when it comes to any questions you have related to your repayment.
- Often times, just for consolidating, your total debt is often reduced.
- With consolidation more often times than not comes a lower interest rate.
- You can also pay more than just the monthly minimum requirements, meaning that youc an pay off you debt a lot quicker as soon as you have the funds to do so.
- Along with not having to pay any fees to use federal student loan consolidation, you also won’t be charged a fee if you want to pay off your loan faster than normal.
- Federal student loan consolidation provides you with just one interest rate instead of paying multiple interest rates.
Federal Student Loan Consolidation – Disadvantages
- Although you are able to make smaller payments, this comes with a negative side as well meaning that you will end up paying more on the loan as well as more in interest in the long run.
- It will probably not save you much at all or provide you with benefits if you have already been paying your loans for some time.
- You will lose your grace period or whatever is left on it if you conolidate your federal loans during the time of your greace period.
- The benefits that you have enjoyed with your other lenders will not transfer over to your federal student loan consolidation orgaization.
- You can not consolidate any amount of student loans. Most federal student loan consolidation companies require that you have at lest 5,000 to 10,000 in student loan debt, more often than not over 10,000.
- You cannot consolidate federal loans and student loans with the same consolidator, you would have to go through different consolidation companies.
Federal Student Loan Consolidations – Companies To Use
If you feel that the benefits of federal student loan consolidation mentioned above outweigh the negatives, here are 3 great reputable resouces that you can use for conolidation:
- Next Student – Considered the best federal student loan consolidation company around.
- Loan Approval Direct – Another great company to use for consolidation that can provide you with payments 60 percent off.
- Debtconsolidation.com – One of the best online resoures when it comes to federal student loan consolidation
- Sallie Mae (Although this program is currently suspended, check in if it is activated again as it provides some of the best benefits around.