Student Loan Consolidation Information

 If you are still trying to decide whether or not college student loan consolidation is right for you, you may need to gather more information and learn all the facts before you can make an informed decision. Not knowing all the facts could lead you into making the wrong decision which may well cause you to end up paying a higher interest on your debt.

The following commonly asked questions and answers on student loan consolidation information will provide you with some tips and advices:  

 What types of loans can be consolidated?

• Stafford Loans - Subsidized and Unsubsidized
• Federal Direct Stafford Loans - Subsidized and Unsubsidized
• HEAL/HPSL Student Loans
• Parent PLUS Loans
• Federal Direct Parent PLUS Loans
• Federal Consolidation Loans
• Federal Direct Consolidation Loans
• Perkins Loans
• Nursing School Loans and more...
• Private Student Loans

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Who Can Consolidate?

Both student and parent borrowers can consolidate their education loans but this has to be done seperately. They cannot combine their loans since only loans from the same borrower can be consolidated.

When can you consolidate your student loans?

Students can only consolidate their education loans during the grace period or after the loans enter repayment. (Loans that are in default but with satisfactory repayment arrangements may also be consolidated.) Students can no longer consolidate while they are still in school.  

Are there any minimum balances required to consolidate?

For private student loans consolidation, there is usually a minmum amount of $7,500 but some lenders may allow you to consolidate with just $5,000 in loans. As for the federal direct student loans consolidation, there is no minimum requirement.

How Do I go about consolidating my student loans?

You are free to look for any lenders for your student loans consolidation but it's wise to start off with your original lender and use them as the baseline for comparison with other lenders. The paper work involved in consolidation of your student loans are minimal and many offered online registration.

I have only one loan, can I still consolidate?

Yes, you can still consolidate a single loan provided that loan is not already consolidated. You can only re-consolidate a consolidated loan provided you include additional loans to it.

Can I consolidate my federal direct student loans with my private student loans?

No, you can consolidate both federal direct student loans and private student loans together but you can however, consolidate them seperately. It's alos not advisable to consolidate them together as feredal direct student loans usually comes with a lower interest rate. You'll end up with a higer interest rate if you were to combine both together. Moreover, you will also lose several important benefits of the federal education loans, such as flexible repayment terms and generous loan forgiveness and cancellation provisions.

Are there any fees to consolidate?

There is no cost involved for consolidating your federal direct students loans but there may be an origination fee ranging from 0%-5% depending on your credit score on consolidating your private student loans.

How are the interest rates calculated?

Private student loan interest rates are calculated based on a published index such as the Prime Rate or LIBOR (London Inter Bank Offering Rate) plus a margin based on your credit score and credit history. If a cosigner is required, your interest rate will be determined based on your credit, and your cosigners' credit.

Because the interest rate is variable, it will fluctuate over time. Interest begins accruing when the loan is disbursed.

For Federal direct student loans, the interest rate is fixed and is calculated as the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%, and capped at 8.25%.