Many students receive student loans to pay for the expenses they face during their teaching life. Student loans are divided into two; Federal student loans and private student loans. If you ask question that ‘How can I consolidate my student loans?’, the first thing you should be aware of is that the student loan consolidation covers only federal student loans. The student loans consolidation does not include private student loans.
Direct Consolidation Loans are the consolidation of federal student loans. Multiple federated students are converted into a single credit and you pay a monthly fee. You do not pay fees when you apply to combine your federal student loans into Direct Consolidation Credits. However, if you receive assistance from private companies to apply for Direct Consolidation Loans, you will have to pay a certain fee. These companies have no affiliation with ED’s consolidation loan services and the US Department of Education (ED). Since the application process is free and simple, there is no need to pay anyone for help in obtaining a Direct Consolidation Loan.
If you saying ‘How can I consolidate my student loans?’, you need to know some things
If you say ‘How can I consolidate my students?’, the first thing you need to know is the benefits or losses that the student loans consolidate. Before consolidating student loans you need to know the advantages and disadvantages it provides. You can then decide whether you want to consolidate student loans. Because there are other options to make payments easier.
Advantages of student loans consolidation;
- If you make a student loan consolidation, you make a single monthly payment for a single loan instead of paying monthly for more than one loan.
- If you consolidate student loans, you can extend the loan term. For example; 30 years. This reduces the amount of credit you have to pay monthly.
- That’s probably why you’re asking ‘How can I consolidate my student loans?’ : consolidation gives you access to additional revenue-based repayment plan options and PSLF donations when you combine loans other than Direct Loans.
- You can convert your loans with variable interest rates into loans with fixed interest rates.
Disadvantages of student loans consolidation;
- Consolidation may result in the loss of certain borrowing rights associated with your existing debts, such as interest reductions, principal refunds, or certain loan cancellation aids.
- When you consolidate your loans, the significant interest in the consolidated loans becomes part of the principal balance of your consolidation loan.
- Before asking the question ‘How do I consolidate my students loans?’ you should consider this disadvantage well; If you pay your existing loans under an income-based payment plan, or make payments that qualify for Public Service Loan Donation, consolidating your existing loans will result in loss of credit for payments to the revenue-repayment plan or PSLF.
If you do not want to lose the advantages of some of your existing loans by converting them into Direct Consolidation Loans, you should not include them in the consolidation. You do not need to convert all eligible credits to Direct Consolidation Credits in order to receive Direct Consolidation Credits. It is up to you to decide which credits you will convert to Direct Consolidation Credits.
If you say ‘How can I consolidate my student loans?, the second thing you need to know is which credits you can convert to Direct Consolidation Loans. The types of loans that are eligible for Direct Consolidation Loans are as follows;
- Not-guilty and not guilty Federal Stafford Loans
- Subsidized Federal Stafford Loans
- Additional Credits for Students
- PLUS credits from the Federal Family Education Loan (FFEL) Program
- Nursing Student Loans
- Federal Perkins Loans
- Health Education Aid Credits
- Faculty of Nursing Credits
- Disadvantaged Student Loans
- Health Professions Student Loans
- Direct PLUS Loans
- Direct Subsidized Loans
- Direct Non-Participating Loans
- Federally Insured Student Loans
- FFEL Consolidation Loans and Direct Consolidation Loans (under certain conditions only)
- National Direct Student Loans
- Guaranteed Student Loans
- Main Credits for Undergraduate Students
- National Defense Student Loans
- Credits to Help Students
What do I need to consolidate my student loans?
If you saying ‘How can I consolidate my student loans?’, you must meet certain requirements. Some of these eligibility requirements are;
- In general, you cannot consolidate an existing consolidation loan unless you include an additional eligible loan in the consolidation.
- In order to consolidate your loans, your consolidated loans must be in the repayment period or the grace period.
- If you meet certain conditions, you can reassemble your FFEL Consolidation Loan without using an additional loan.
- If you are asking ‘How can I consolidate my student loans?’ for a defaulted loan, you must do the following before you can consolidate your loans;
- You must have a satisfactory repayment plan for your credit payment.
- You should receive a New Direct Consolidation Loan and repay it in the following ways;
- Pay As You Win Reimbursement Plan,
- Revenue-Conditional Reimbursement Plan,
- Revenue Based Reimbursement Plan,
- Repayed Payment As You Win Repayment Plan.
‘How can I consolidate my student loans?’ those who say, when should start paying back?
‘How can I consolidate my student loans?’ for those who say so, the reimbursement period begins 60 days after the loan payment.
If any of the loans you wish to obtain at the time of applying for a Direct Consolidation Loan are still in the grace period, you may request a postponement from the officer who processed your application. This will ensure the necessary delay for your consolidation loan. This way, you won’t have to start paying for your Direct Consolidation Loan until the end of the grace period on your existing loans.
When you want to receive a Direct Consolidation Loan, you pay interest at the same fixed rate throughout the life. This ratio is the weighted average of interest rates on consolidated loans. There is no limit on the interest rate of the Direct Consolidation Loan. If you are interested in ‘How can I consolidate my student loans?’, you should pay attention to the interest rate.