debt consolidation loans

Direct student loan consolidation

To consolidate into bring multiple federal or private student loans into one. The result is that instead of making several monthly loan repayments, you only make a single payment. Student loan consolidation is a popular practice in major college and universities. One persistent question that many a student asks is whether they should consolidate their loans or not.

The truth of the matter is that student loan consolidation is one of the ways in which you can reduce the monthly loan repayments from several to just one.Rememeber this is one of the surest ways in which you can manage your loans.

Secondly, it is the best way to take advantage of the low interest rates availed to you by the lender which is way below the one that is offered by the traditional banks and other institutions. Thirdly, you will be able to make low monthly repayments over an extended period of time.However; you also bear in mind the fact that increasing your loan period of payments may actually have the net effect of paying more in the long run.

If your former lender was offering you some benefits, you Amy end up losing with student loan consolidation. This basically means that you should do your opportunity cost and see whether whir t you are gaining is in fact far much better than what you are giving up.

Know what can be consolidated

Not every type of loan can be consolidated. Examples of loans that can be consolidated include the direct subsidized loans, direct plus loans, subsidized federal loans among many others. It is important that you research to find out if your kind of student loan qualifies to be consolidated.

When to consolidate

Many students do not know the correct timing for student loan consolidation. This basically means you are either leaving schools, after graduation or you are not yet at par with the half-time enrolment plan. In any of the above three instance, it becomes inevitable that you apply for and be pre-qualified for the loan.


There are such things as pre-qualifications for one to get the student loans. The first one has to do with the agreement that you will enter with the new lender. Will you be able to make payments based on the income i.e. income based repayment plan.  You can also use Pay as You Earn Repayment or the income contingent plans.

Ask about the interest rate

The interest rate on consolidation is an important and fundamental aspect of the loan. The rate could either be fixed or varying rates. The choice is dependent on what you will agree with the lender. You should ensure that you go for the one that is low so that you can afford the repayments.

 When repayments are to be paid

These are usually not immediate and as you will find out, you will be given a grace period of 2 months before you making your first payment. This gives you time to arrange your finances.

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