Federal Loan Consolidation - Most Common Questions Asked

Why should you use federal loan consolidation? 

Many college students choose to borrow money, through the form of federal student loans. Unfortunately, paying them back is not the easiest thing to do. Federal loan consolidation may ease the financial struggle that many may experience while trying to pay back the money. 

What benefits does federal loan consolidation offer? 

There are many benefits associated with consolidation. Since two or more loans can be merged into one, borrowers will be able to take advantage of once-monthly payments. The repayment period can be extended, as a result, there will be lower monthly payments. Your interest rates will also be lower. 

What type of interest rate is there with consolidated loans?

Most student loans have adjustable interest rates, which means that the interest rate on your loans can decrease or (most likely) increase at any time. Consolidated loans offer fixed rates, however, which means that it will remain stable until you pay it back. This is beneficial, as there will be no surprise changes in the interest rates on your loans. 

How high can the interest rate on consolidated loans be? 

8.25% is the maximum percentage rate for consolidated loans. Usually, the interest rate that you can expect to receive will be equal to or perhaps less than the average of all the interest rates on your student loans. 

Are there eligibility requirements? 

Yes. Only certain types of student loans qualify for consolidation. Although private loans can be consolidated, most companies require you to separate them from federal student loans.