Consolidating loans direct loans

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If you have a FFELP loan(s) you may be able to consolidate in the Direct Consolidation Loan Program. If you don't know who your servicer(s)/lender(s) is, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information. Waiting to consolidate until after that six-month to nine-month grace period allows you to delay repayment.

However, if you consolidate sooner you may be able to lock into a lower, fixed interest rate on your consolidation loan before the variable interest rates on your individual loan(s) start to rise.

Federal consolidation loans allow borrowers to combine several federal student loans into one loan to streamline loan repayment.

The monthly payment amount may decrease because repayment can be spread over a longer time period.

FFEL and Perkins loans are not forgivable under Income-Based Repayment (IBR), Pay as Your Earn (PAYE) or Public Service Loan Forgiveness (PSLF).

FFEL and Perkins loans may be “converted” to a Direct Loan (which is forgivable under the above programs) by requesting a Direct Consolidation Loan to “pay off” FFEL and Perkins Loans.

A National Student Loan Data System (NSLDS) lookup will be performed, and information about an applicant's federal education loans will populate within the application.Review the terms and conditions associated with each loan program before you apply.Alternative lenders may require you to be in active repayment before you can apply.In that case, consolidating early could help you save money in the long run. Close Consolidated loans feature the same repayment options as other federal loans, ranging between Standard repayment, Extended repayment, Graduated repayment, Income-Sensitive Repayment, Income-Contingent Repayment, or Income-Based Repayment plans.The repayment period will last 10 to 30 years depending on your student loan debt and the plan you've chosen.Once an applicant submits his or her application electronically via Student , the consolidation servicer will complete the actions required to consolidate the applicant's eligible loans.

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