Single Mom School Loans

Education Loan Consolidation-the Easier And Cheaper Way To Manage Your Student Loans

An education loan consolidation is designed to put all your student loans into one account to fixed their interest rates and lower your monthly payments. Both the government and private lending agencies offer this type of program. But before you apply for an education loan consolidation, be sure to check out the following information.

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Are multiple student loans driving you nuts? Then you should really try applying for loan consolidation. This is also a good option if you want to lock into a specific interest rate and make cheaper monthly payments. If you didn’t qualify for forbearance and deferment plans, this is one alternative solution that you can consider.



An education loan consolidation is available for almost all federal subsidized and unsubsidized student loans. These include Subsidized Stafford Loans, Guaranteed Student Loans (GSL), Federal PLUS Loans, Perkins Loans, and Loans for Disadvantaged Students (LDS), among others. Take note that private loans and federal loans can never be consolidated into one account.

There are plenty of benefits when you enroll in loan consolidation programs. Your loans are easier to manage, and you also have different repayment options. The Federal Direct Consolidation Loan allows borrowers to choose flexible repayment plans that adapt to their changing needs. There are also no minimum and maximum loan amounts that need to be followed. To be eligible, you must have more than one private or federal student loan. These loans should currently be in their grace period, repayment period, deferment or even defaulted status. Both students and parents can apply for consolidation. However, a student and his/her parents can’t put all their loans into one consolidated account.

The interest rate is equivalent to the weighted average of the interest rates of all loans being consolidated. The result is then rounded up to the nearest one-eighth of a percent, but shouldn’t be more than 8.25%. Some private lenders might have consolidation loan limits being imposed. Wells Fargo, for instance, allows borrowers to consolidate $5,000-$100,000 only. There are no fees involved for putting your loans into consolidation. If you think you’re eligible, you can apply for a Federal Loan Consolidation by submitting a paper application, web application, or by calling. Some of the private institutions that offer this include Chase Bank, Wells Fargo, and Student Loan Network.

There are various selections for federal loan consolidation repayments. Most of these are based on the borrower’s income, amount borrowed, and household size. These options break down repayment amounts into more affordable monthly payments for a certain extended period. A borrower must continue paying for each loan separately until a notification is sent that the loans are already consolidated.

Always make it a point to know your rights and responsibilities before you apply for this. Keep mind that you might end up paying more in the long run due to the extended repayment period. Consider programs offered by the federal government first. If you don’t qualify, try private education loan consolidation.