To be eligible for federal student loan consolidation you must be no longer enrolled in school, in the grace period of the loan, or must already be making repayments. And most consolidation companies need a minimum loan amount, where $10,000 is typical.
If you have several student loans from the federal government and plan to consolidate the debts, you can seek the help of a debt consolidation agency. There are special agencies that deal with student debt problems and offer consolidation loans. In addition, the debt consolidation company also offer many other benefits that can give you peace of mind.
Benefits of Student Loan Consolidation
Tired from paying interest on student loans every month? Afraid of the deadline of paying back loans? Student loan consolidation companies offer programs and solutions. If you are a parent of a student or a student who is just about to receive a degree, you may enjoy the following benefits:
- Lower monthly payments.
- Lower interest rates than student loan rates.
- Tax deductible interest rates.
- Potentially save thousands of dollars in interest rate charges.
- No prepayment penalties, you can pay off your loan at any time without incurring a penalty.
- Only one monthly payment than paying separately.
- There are no credit checks and employment verification.
- The terms and repayment plans are very flexible.
The Best Time for Federal Student Loan Consolidation
If you’re close to the end of your student loans, taking on a new loan may not be worth your time and effort. However, if you still have a long time to go and many payments ahead of you making a fresh start with a student loan debt consolidation is good for you. This is especially true if you’ve already exhausted the deferment and forbearance options on your existing loans.
The right time for federal student loan consolidation is when you’ve already out of school and in the grace period of the loan. However, since the loan application can take about 2-3 months to process, your best time is just about 2 months before graduation.
When you’re about to graduate or in the grace period of the loan you’re eligible for a grace period interest rate discount. This is the time when you can get most benefits of federal student loan debt consolidation.