Direct Loan Consolidation

Direct Loan consolidation is something you may want to consider for a number of reasons if you have more than one federal financial aid loan. It combines those loans into one repayment plan. One of the loans must consist of a Direct Loan or Federal Family Education Loan (FFEL) to qualify for consolidation. The loan must also rest in grace, deferment, default or repayment status to qualify as well. There are a number of loans that are eligible for consolidation with a Direct Loan or FFEL, like PLUS Loans, Perkins Loans, some health professional loans and more. Keep reading for more information about Direct Loan consolidation.

Benefits of consolidating

One of the main benefits of consolidating your loans is that it is easier to manage one monthly bill from one lender than a number of bills from a number of lenders. You can also choose, and later change, your repayment plan to meet your needs. You may qualify for new deferment benefits. Consolidation could lower payment amounts, and there are no fees or minimum or maximum amounts owed to apply for consolidation.

Repayment plans

There are a number of plans available for every type of borrower. There are specialized repayment plans for people who owe over $30,000, individuals experiencing financial difficulties, people who want to make a set payment on a monthly basis, people who want to pay less now and pay more later and other tailored plans. Make sure you consider all of your options carefully, and receive as much information as you can before making your decision.

Another thing to consider is the consequences of not sticking to your repayment plan, which can include bad credit reports, accounts that are put into collections, ineligibility for student aid and deferments, the garnishing of your wages and more. Make sure to take your time, and consider your options carefully before choosing consolidation.