A Direct Consolidation Loan Loan Program allows the borrower to consolidate (combine) multiple federal student loans into one loan. As a result, a single monthly payment is made instead of several ones.
There are no fees for applying for consolidating your federal student loans into a Direct Consolidation Loan Program Loan. If someone contacts you to offer you to consolidate your loans in exchange for a commission, it is not the Department of Education so you should not trust this person.
Should I Consolidate My Loans?
Consider carefully whether loan consolidation is your best choice. Loan consolidation can significantly simplify the repayment of loans to centralize a single account, and can reduce your monthly payments by granting up to 30 years of time to repay your loans.
Alternative Payment Plans
You could also have access to alternative payment plans which you have not previously had access to, and will have the ability to change your loans with variable interest rates for those with a fixed interest rate.
Compare Your Monthly Payments
However, if you extend the term of the payment period, you must also make more payments and pay more in interest. Compare your current monthly payments to the amount you would represent if your loans were consolidated.
Be Careful Not to Lose Loan Benefits
You should also take into account the impact of losing the benefits that were offered with the original loans. The benefits of your original loan, may include discounts on the interest rate, returns on a portion of the capital or some loan cancellation benefits.
Carefully Consider Obama Loan Consolidation
These can significantly reduce the cost of repayment of your loans. You could lose these benefits when performing consolidation. So it is important to take all things into consideration when deciding if you should consolidate your loans.
If you want to reduce the amount of your monthly payments but are concerned about the impact of consolidation loans, you may reconsider the status of your budget and income. You may also consider the possibility of requesting a deferment or a temporary suspension of collection when you need short-term relief from your payments.
Make Sure You Can Pay Off the Loans
When you combine your loans into one Obama Direct Consolidation Loan Loan Program, they may not be withdrawn. Loans that were consolidated have been paid in full and cease to exist. So it is important that you make sure you can pay off these loans.
Which Loans Are Available For the Obama Consolidation Program?
Most federal student loans, are suitable for consolidation this is nice because it allows anyone that has taken out several loans to easily consolidate their loans if they have decided this is the best option for them. Here are some of the loans available for consolidation:
- Subsidized interest loans from the Direct Loan Program
- Unsubsidized loans interest from the Direct Loan Program
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- PLUS Direct Loan Program
- Federal PLUS Student Loan Program
- Federal Family Education Loan Program (FFEL) Loans
- Supplemental Loans for Students (SLS)
- Federal Perkins Loans
- Federal Loans for Nursing Students
- Student Health Loans