Federal Consolidation Loan
As we know more than 50% of Americans now go to college and almost all of those make use of the federally subsidized student loans system, Pell grants, Stafford loans, PLUS and all of the rest of them. It’s also true that students often end up taking out many more than one of these loans: different schools, different degree programs, for direct school expenses and perhaps for the cost of simply living. Over time this can all become incredibly messy, with different institutions wanting payments each month on these many different loans. This is why there is a system of federal consolidation loans.
Continue ReadingSyndicate or Share
What you can do is to take all of your different student loans and bundle them together (that’s what consolidate means) into one which is then owed directly to the Department of Education. There’s no fee for this and it has three main benefits. The first is as above, the simplicity. One monthly payment is a great deal easier to manage than the many you had before, so that’s one advantage of a federal consolidation loan.
The second advantage of a federal consolidation loan is that you can fix the interest rate. Many basic student loans are at floating interest rates, so if rates go up in general so do your monthly payments. A consolidated loan however is at a fixed interest rate, so you can lock in the low current rates.
The third, and perhaps most important, advantage of a federal consolidation loan is that your deferments, the allowances you have before you have to start making payments, can be extended.
Resources
Get a Quote
We maintain close ties to many different lenders and hundreds of different home loan programs to make sure you get the best rate and product available.
Rates as of Sunday, October 12, 2008
| Institution | Rate % | APR |
|---|---|---|
 |
5.875 | 5.911 |
 |
5.875 | 6.033 |
 |
5.875 | 6.051 |