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What is student loan consolidation?

Jan 11, 2012 by Danny from Austin, TX in  |  Flag
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The government is offering something now called the direct loan. Everyone with student loans should get information about it within the next few months. Basically, it allows people with SL's to consolidate the loans, sometimes at a slightly better interest rate. It also limits the monthly payment to no more than 15% of discretionary income. I'll be the first to say I am no expert here, yet. Just know that what I have investigated makes me say it is worth looking in to - just don't extend the term of your loan as this could cause more interest to be paid despite the possible lower rate/the max monthly limit.

Comment   |  Flag   |  Jan 27, 2012 from Peoria, IL

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When you combine two or more outstanding student loans into a single loan. You may do this do get a lower rate or to just make life easier with one payment,

Comment   |  Flag   |  Jan 31, 2013 from Grandville, MI

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Jason Hull Level 20

Student loan consolidation is generally done so that you can merge all of your federal loans (subsidized and unsubsidized federal loans) into one payment and one loan. It's usually done so that you can receive a lower interest rate - you get a chance to do a one-time loan lock in. I consolidated mine right after business school because I got a lower interest rate. However, don't let the lower interest rate or terms fool you; you still have to pay that sucker off, and the sooner the better. Don't let the idea that you can (potentially) use student loan interest as a deduction cause you to delay. I found out pretty quickly that I couldn't deduct my loans because of other limitations. Debt is still debt, and there's no such thing as good debt.

For more on the program, you can check out the link below:

http://www.loanconsolidation.ed.gov/

Comment   |  Flag   |  Feb 28, 2013 from Fort Worth, TX

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