Education Loan Consolidation

By Sam Ferdi

Consolidate Student Loans

An education loan consolidation will allow you to combine all your student loans into one, relieving you of the need to try and keep up with all of them. And you may be able to find a lender who offers better interest rates on a single education consolidation loan than the average interest rate for your multiple student loans.

About Education Loan Consolidation

• Most education loan consolidation lenders will not consolidate loans with a total balance of under $7,500. The Direct Loan Program is the most popular one that handles loans with a balance lower than $7,500.
• You can consolidate more than once as long as you have a new loan added to the consolidated loans.
• Once an interest rate is fixed it does not change so you have to stick with it for the full loan term.
• Lenders for federal education loan consolidation usually offer deferment and forbearance options.
• You can consolidate your loans while you are enrolled in a program and delay payments until after you have completed the program.
• Most lenders offer borrower benefit programs that decrease the amount of interest you have to pay for choosing to enroll in a direct debit program or making a certain number of consecutive payments.

How to apply for an Education Consolidation Loan

In order to apply for an education consolidation loan, you’ll need to present an accurate record of your existing student loans. You can apply for an education loan consolidation at any credit union or bank which belongs to the Federal Education Loan Program (FELP).

Interest Rate

With the interest rates in the universe of higher education loan programs are now at record lows, there is no basis for the graduates not to investigate education loan consolidation.

The interest on consolidation loans is based as much on the Federal Treasury’s loan standard as your federal student loans. The interest rate is capped at 8.25% which means that you will never have an interest rate that is higher than this, but you can definitely have one that is considerably lower.

If you decide to go for an education loan consolidation while you’re still a student, you must inform the lender that you are asking for early repayment status.

You should find the best terms you can in applying for an education loan consolidation process, because you may only consolidate your student loans once. You will probably not be able to consolidate any student loans which do not total at least $7,500, and it is your responsibility to initiate and follow through on consolidating your student loans.