ULTIMATE LOAN SUPERVISOR

The private loans are not considered for federal loan consolidation. Only federally guaranteed student loans can be considered for federal loan consolidation. Another criterion of eligibility is that these loans have to be in forbearance or deferment or repayment or grace period.The loans that are eligible for federal loan consolidation are Federal nursing student loan, Health professions student loan, Federal insured student loan, Federal supplemental loan for students, Federal parent loans for undergraduate students, Federal perkins loans, Federal graduate plus loan, Federal direct loan, Federal consolidation loan and Federal Stafford loan.

Federal loan consolidation is possible only if the debtor has not included all eligible loans in the earlier consolidation or may have taken more federal education loans after the previous consolidation. If the federal loan consolidation was done in the previous 180 days, the person can submit an addendum “Request to add loans to a federal loan consolidation.” If the federal loan consolidation was done more than six months back, the person can fill in a new “federal loan consolidation application”.  If loans are added to the existing federal loan consolidation, the monthly installment amount, interest rate and the repayment term may get modified. For federal loan consolidation, there is no need of a co-signer. There is no need to be employed. The credit rating of the person does not have an effect on the eligibility. The effects of federal loan consolidation are as follows – There is a locked-in fixed interest rate. The person has to make a single and low monthly payment to a single lender. The repayment period is longer. In federal loan consolidation, if direct debit is used, a new arrangement can be set up. Federal loan consolidation does not affect the person’s ability in the following respects:  

• Maintaining a good credit rating
• Altering the repayment plan
• Postponing payments by forbearance or deferment
• Repaying the loan quickly in the absence of any penalty

For federal loan consolidation, no minimum balance is required. Also, there is no limit to the number of loans that can be consolidated. In federal loan consolidation, only a single loan can be consolidated to extend the repayment period. The interest rate of a federal loan consolidation is the weighted average interest rate of all the loans being consolidated and rounded up to the nearest 1/8 of a percent. The federal loan consolidation rate can not be in excess of 8.25%.The interest rate reductions in federal loan consolidation are as follows. There is a 0.60% rate reduction for consolidation during the loan grace period. There is an immediate 0.25% rate reduction for automatic debit payments. There are no fees for this consolidation. If consolidation is done during the grace period for the underlying loans, the person can get a 0.60% low interest rate on the new consolidation loan. After the application is completed, there is an option to process it immediately or postpone till the end of the grace period. If it is postponed, the interest rate will be locked. If there are subsidized loans, government subsidy payments can be received on interest.