Federal Student Loan Consolidation

Federal Student Loan Consolidation

Federal Loan Consolidation offers students the facility to refinance their federal loans by combining all loans into one single liability thereby reducing the complexity in handling number of loans. Not only will this help students in simplifying their debt but also in reducing their monthly liability by more than half.
Consolidation Process :
Federal Loan Consolidation process is conducted as per the guidelines offered by the Federal Govt to the lenders under the Federal Family Education Program. The question of accountability now reduces to one lender and flexibility in repaying the loan enables the borrower to mange his personal finance as well.
Not just making it one consolidated loan liability also reducing the monthly payment is an excellent help one could offer. The reduction in liability is more than 50% in many cases. Lower monthly payment option does not stop you from repaying the loan early and no prepayment penalty is levied for early closure of loans.
Interest Rate:
Interest is another important aspect in loan consolidation. The interest rate for federal loan consolidation is arrived on the weighted average basis of the loans to be consolidated. The rates are generally fixed which ensures protection from change in market conditions. If you are about to complete your Graduation or have recently completed it would be the right time to apply for a loan consolidation as the interest rates are also low during this period.
The loans to be consolidated should not fall under defaulted or in-school status category in which case they will not be eligible for consolidation. The total loan consolidation amount should not be any way less than $25,000.
Repayment Options for Federal Loan Consolidation:
The time allowed for repayment generally does not exceed 30years and the repayment can either be made on an equated monthly installment basis or on a gradual increment basis. No credit check is required under the Federal Family Education Loan Consolidation Program.
Not just flexibility in repayment, you can even postpone your payment for a fixed period of time enabling you to manage you financial condition immediately after Graduation. You can avail 36 months of deferment and 36 months of forbearance.