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ADDITIONAL INFORMATION
Students.net Student Loan ConsolidationAdditional Information
ADDITIONAL INFORMATION    Ver en Espaņol

Direct Consolidation Loan

Direct Consolidation Loan combine two or more federal loans in just one federal loan.

Advantages:

  • The interest rate is low and fixed for the whole loan repayment period.
  • The consolidation process is not charged.
  • The interest rate will be even lower if consolidation happens while you’re still studying or in grace period.
  • The interest rate is calculated on the pondered average of the current loan´s rates.
  • Combination of various loans in one single loan.

Repayment options:

  • Standard. Every month you pay the same amount, which was fixed at the time of loan consolidation.
  • Two-year gradual. On the first two years you repay interest and from the third year onwards you pay capital plus interest.
  • Five-year gradual: On the first two years you repay interest, then a combination of interest and a little part of the capital, and from the sixth year onwards you repay capital and interest.
  • Repayment is based on your yearly income and thus you need to produce a copy of your IRS tax statement every year.


Loan consolidation application process:

To consolidate your Federal Loans (FFELP Loans) you must contact the financial institution that granted your loan (your current lender). If you have more than one lender, choose one to apply for loan consolidation.

The consolidation lender will send you the necessary information, application form and instructions (Federal Consolidation Loan Application and Promissory Note). Once you send the signed form and the required details, approval or rejection will be decided in a period of between 30 and 90 days.

If loan consolidation is approved, the consolidating institution will pay for your debts to the other lenders and they will send you a letter with the resulting amount you owe, the interest that will be charged and the new agreement on the interest rate and the monthly payments. Do not stop paying your current loans until the consolidation loan is running.

In cases of direct loan consolidation, the students (or his or her parents if they have a Plus loan) must address the Consolidation Department in the Direct Loan Origination Centre.

If your want information about Direct Consolidation of Student Loans, you can ask to the Consolidate Department phone 1-800-557-7392 or you can find the necessary information, application form and instructions in their website.


Loan consolidation forms

FFELP loan consolidation form

FDLP direct loan consolidation form


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