A lot of college students graduate having multiple loans usually between eight and twelve in accordance with the plan. The burden of managing this many student loans may be overwhelming however there are solutions to make it easier for you to manage your repayment.
If, for instance, your federal student loan balance is high, you can combine them into a Direct Consolidation loan. This will leave you with only one loan and payment to track.
What is a Direct Consolidation Loan?
You can combine multiple federal loans for students into Direct Consolidation Loan. This will give you just one monthly installment to track.
If you’re thinking of consolidating federal student loans Here are some crucial points to take into consideration:
- The interest rate is:Your interest rate on direct Consolidation loan will reflect the weighted mean of the rates of the loans you wish to consolidate, and then multiplied by one-eighth of a percentage. If certain loans have high rates of interest that you can be paying a lot greater in terms of interest.
- Schedule of repayment:With Direct Consolidation Loans, you may extend the repayment period of your loan up to 30 years which will significantly lower the amount you pay each month. Be aware that you’ll be paying more interest over the course of an extended term.
- Balances on loans: Any outstanding interest on credit cards will add to the primary balance when consolidating. This means that you may be paying interest on a greater balances than what you began with.
How do I apply for Direct Consolidation Loan
If you are considering consolidating the federal loans you have taken out, be sure to follow these steps:
1. Review your loans
Before beginning your application, it’s necessary to determine which loans you’d like to add to the consolidation. You can look over your federal loans using your National Student Loan Data System (NSLDS).
2. Get your documents together
For the application to be completed to fill out the application, you’ll need a Federal Student Aid (FSA) ID. In the event that you do not have an FSA ID, it’s possible to make one available on StudentAid.gov — it’s all you need is the mobile number of your phone along with an email address, as well as you’ll need your Social Security number.
3. Fill out the application
After you’ve collected your data and have it in hand, you’ll be required to complete your Direct Consolidation Loan application. The application process typically takes around 30 minutes.
4. Control your payment
It generally takes 30 to 45 days to finish the consolidation. During this time, make certain to make your monthly loan payments.
Then, you can start paying the newly-created Direct Consolidation Loan. It is possible to sign up for autopay in order to avoid not making payments in the future many service providers provide a rate reduction for borrowers who choose automated payments.
Should I refinance instead of consolidating student loan debt?
If it’s more beneficial to privately refinance or consolidate federally your student loans will be contingent on your personal situation and financial objectives. Based on the quality of your credit, student loan refinancing may result in lower interest rates and could help you save some money and assist you in repaying your loan faster.
If you are considering refinancing the student loan you have, make certain to research the most lenders you can to locate the perfect financing option for your needs. Credible makes it easy it allows you to compare prequalified rates from a variety of lenders in less than two minutes.