Federal Consolidation Loan For Student

In the United States, the Federal Direct Student Loan Program (FDLP) includes consolidation loans that allow students to consolidate Stafford Loans, PLUS Loans, and Federal Perkins Loans into one single debt. This results in reduced monthly repayments and a longer term for the loan. Unlike the other loans, consolidation loans have a fixed interest rate for the life of the loan.

Consolidation loans have longer terms than other loans. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans. The fixed interest rate is calculated as the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%, and capped at 8.25%. Some features of the original consolidated loans, such as post graduation grace periods and special forgiveness circumstances, are not carried over into the consolidation loan, and consolidation loans are not universally suitable for all debtors.

The Federal Loan Consolidation Program was created in 1986. In 1998, the United States Congress changed the interest rate to the aforementioned fixed rate weighted mean, effective February 1, 1999. Consolidation loans taken out before that date had a variable interest rate, determined by the individual FDLP loan origination center (e.g., in the case of a university, that university) or FFELP lender (e.g., a third party bank).

In 2005, the Government Accountability Office considered consolidating consolidation loans so that they were exclusively managed through the FDLP.

If you make more than one monthly student loan payment, you may find life easier with one affordable payment. A Direct Consolidation Loan brings all of your federal student loans together with a fixed interest rate. Consolidation gives you up to 30 years to repay your loan, depending on your loan balance. Most federal student loans, including subsidized and unsubsidized Direct and Family Federal Education Loan Program (FFELP) Stafford and PLUS loans, are eligible for consolidation. Private education loans are unfortunately not eligible to be consolidated.

If you have any questions about consolidation or need assistance, please call us at 866.426.6765.

Apply online for a Direct Consolidation Loan here.

Adding Loans to Your Direct Consolidation Loan

After your new Direct Consolidation Loan is complete, you still have the opportunity to add additional eligible loans. If you would like to add other eligible loans, your servicer must receive your Request to Add Loans Form within 180 days from the date your Direct Consolidation Loan is completed (originated).

Please note that if you have more than six loans to add to your consolidation loan, you will need to submit more than one Request to Add Loans Form.

The 5 Best Banks to Refinance and Consolidate Student Loans in 2015

Finding the right bank to refinance or consolidate your student loans is confusing.

Fortunately, we’ve highlighted a few banking organizations to help you find private and federal student loan refinancing or consolidation options that fit your financial situation.

If you meet these requirements, you might be an excellent candidate for student loan refinancing and consolidation!

SoFi – Social Finance

Refinancing and consolidation of private and federal student loans

Must have completed an eligible undergraduate or graduate degree program

Available for both undergraduate and graduate school student loans

1.92% APR to 5.17% APR (with auto pay) variable rates, capped at 8.95% to 9.95% APR

3.50% APR to 7.24% APR (with auto pay) fixed rates

5, 10, 15, 20 year repayment terms

No origination fees or prepayment penalties

Medium credit score, salary, and debt-to-income requirements

Unemployment protection – loan payments are paused and they help find new job

Career support – complimentary coaching for SoFi members

Entrepreneur program – qualified applicants can receive loan deferrals and mentorship

DRB – Darien Rowayton Bank

Refinancing and consolidation of private and federal student loans

Must be an alumni of a bachelors or graduate degree program (e.g. MBA, Law, post-residency Medical/Dental, Physician Assistant, Advanced Degree Nursing, Pharmacist, Engineering, PhD, etc.) who meet the underwriting criteria

DRB also offers parents of Bachelor degree holders the opportunity to refinance student loans they took out to finance their child’s education as long as their child has graduated and is working. Parents can refinance Parent PLUS loans in their own name or their child’s name.

1.92% – 3.98% (with autopay) variable rates

3.50% – 6.25% (with autopay) fixed rates

5, 10, 15, 20 year repayment terms

Maximum variable rates capped at 9% for 5,10,15 year terms. For 20 year term, maximum rate cap is 18% APR

Medium credit score, salary, and debt-to-income requirements

No origination fee or prepayment penalty

.25% Interest Rate Reduction with automatic payments via ACH

Charter One Bank ( aka Citizen’s Bank )

Refinancing and consolidation of federal and private student loans with an Education Refinance Loan® from Charter One®¹

Citizens Bank private student loan customers have saved an average of $127/month²

Fixed rate student loan refinancing featuring an interest rate as low as 2.57% for eligible candidates³

Variable interest rate as low as one-month LIBOR plus 0.17% + margin³student loan refinancing for eligible applicants

15 or 20 year repayment term options

Loyalty Discount: 0.25 percentage point interest rate reduction on a new Education Refinance Loan if you or your co-signer (if applicable) has a qualifying account in existence with us at the time of application.

Automatic Payment Discount: 0.25 percentage point interest rate reduction by authorizing our loan servicer to automatically deduct your payments each month from any bank account.

Co-signer Release: Co-signer may be released from loan responsibility after making 36 consecutive, on-time principal and interest payments.

No application, origination or disbursement fees

Minimum Loan to Refinance: $10,000

CommonBond

Refinancing and consolidation of private and federal student loans

Must have at least a Master’s Degree (e.g. MBA, JD, MD (post-residency), or Engineering graduate degree program within the CommonBond school network.) 1.92% – 5.67% APR variable rate refinancing (with autopay)

3.89% – 7.24% APR fixed rate refinancing (with autopay)

3.97% – 5.83% APR hybrid rate refinancing (with autopay)

5, 10, 15, and 20 Year Repayment Terms

0.25% Interest Rate Reduction with automatic payments via ACH

Must meet minimum lending requirements based on credit score, salary, debt-to-income and other criteria

Unemployment protection – loan payments are paused and they help eligible graduates find new jobs and also hire them for short-term consulting projects

Education Success Loans

Consolidate and Refinance Private Student Loans and Federal Student Loans

25 Year Repayment Term

1 Year Fixed 4.99%* then variable rate for the term of the loan

5 Year Fixed 5.99%* then variable rate for the term of the loan

10 Year Fixed 7.99%* then variable rate for the term of the loan

*Denotes Auto-Pay: 0.25% Interest Rate Reduction with automatic payments via ACH

Eligibility Requirements:

Have received a bachelor’s degree or higher from a Title IV eligible school

Have a minimum of $5,000 ($15,001 if in Kentucky) in private student loans to consolidate

Sources : Wikipedia, nelnet.com, studentloanhero.com