If you’re like most graduates, you probably needed than one loan to finish your degree and are now experiencing a financial hardship to make all the payments. Maybe you haven’t been able to get a good paying job, or stay employed for an extended period of time, or just have too many expenses in general.

If you’re having a difficult time, consider a Federal Student Consolidation Loan. The main reasons you’d want to consolidate student loans is to make your life simpler by having just ONE payment, and to reduce the amount you pay each month. Examples of payment options available include standard, graduated, income-sensitive, income-based, and extended repayment plans on federal student loans.

In the United States, the Federal Direct Student Loan Program (FDLP) allows students to consolidate Stafford Loans, PLUS Loans, and Federal Perkins Loans into one single debt with a fixed interest rate for the life of your loan. This results in reduced monthly repayments. Consolidation loans also have longer terms than other loans. Debtors can select terms of 10–30 years. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans

Some of the best student loan consolidation rates may be acquired by choosing a lender that is endorsed by a certain school. Ask your school about the lenders they recommend and perhaps you’ll be able to lock into a lower interest rate. Also seek the advice of other students who have obtained a loan from a certain lender and take into consideration the experiences they had. It is highly recommended that you seek several lenders and federal student consolidation loan programs to ensure you get the best options. Compare your findings and then make a final decision.

Most consolidated loans offer a fixed rate, but it is still important that you know for sure. Some lenders offer a lower interest rate for the first few years, followed by an increased rate after that. Make sure the federal student loan consolidation rates you agree to are affordable to you now, and will work in your budget in the future, too.

Filed under: Finance • Other Loans

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