Consolidating
your existing, individual student loans into a single consolidated
student loan enables you to simplify the repayment process
and may reduce the overall monthly payment amount. A student
loan consolidation loan simplifies the loan process by combining
several individual student loans (that may have different
terms and repayment schedules or may have been made by different
lenders) into one new loan.
- Student loans that are consolidated into a new student
loan consolidation loan are paid off, and a new loan (the
consolidation loan) is created.
- The overall interest rate on the new consolidation loan
may be lower than on one or more of the underlying loans.
- The amount of time to repay the consolidation loan may
be extended beyond what was available in the separate loan
programs.
- These features may result in more manageable student loan
debt and should make borrowers less prone to default.
While federal student loans and private student loans can
be consolidated to generate the benefits as mentioned above,
please note that most lenders do not allow for both federal
and private student loans to be combined into a single student
loan consolidation loan.
For federal student loans in a grace, deferment or repayment
status, the following types of loans are eligible for federal
loan consolidation:
- Federal and Federal Direct Stafford Loan (subsidized and
unsubsidized)
- Federal and Federal Direct PLUS (in borrower's name only)
- Federal Perkins (formerly known as National Direct Student
Loan or NDSL)
- Nursing School Loan (NSL)
- Health Professional Student Loan (HPSL)
- SLS (Supplement Loan for Students)
- Loans for Disadvantage Students (LDS)
- Federal Insured Student Loan (FISL)
- Federal Consolidation Loan
- Federal Direct Consolidation Loan
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