Pros and cons of consolidating federal loans dating dictionary doc

07 Dec

Loans that can be consolidated include direct subsidized and unsubsidized loans, subsidized and unsubsidized Stafford loans, direct PLUS loans, SLS loans, Federal Perkins loans and Health Education Assistance loans, among others.

Private education loans are not eligible for consolidation.

The following chart can help you understand the upsides and downsides to the different options available for debt consolidation: In a basic sense, a balance transfer is usually a viable option for anyone with excellent credit score who catches their debt problem early.

The biggest downside is the higher fees you usually face for the transfers.

Your grace period on some loans could end prematurely, or you may end up consolidating at the wrong time – too early or too late.

Not all student loan debts can be consolidated, although most federal loans can.

There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan. Department of Education (ED) or ED’s consolidation loan servicers. Top A Direct Consolidation Loan has a fixed interest rate for the life of the loan.So it’s important to understand the upsides and downsides of debt consolidation before sign up for anything to solve your debt problems.The information below can help you understand the advantages and disadvantages of debt consolidation, in general, as well as the pros and cons of specific consolidation options you can use.Many students graduate with more than one student loan, and some graduate with as many as a dozen or more.If you currently have multiple student loans, you could benefit from a consolidation loan on your student debt.Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed.Although all of these different loans may be consolidated, you must have at least one outstanding FFEL or Direct Loan to obtain a Direct Consolidation Loan. Whom do I contact if I have questions about consolidation?There is no cap on the interest rate of a Direct Consolidation Loan.If you have questions or need help choosing the right solution for your situation, just call us at In most cases if debt consolidation is the right option in your financial situation, then there shouldn’t be too many downsides to using the process in general.Any disadvantages are usually specific to the particular method you use for consolidating – more on that below.