Federal Loan Consolidation

Federal Direct loan consolidation has an individual the opportunity to consolidate all outstanding financial loans held by various lenders into a single new loan that may be recovered in single monthly payments. This loan also helps an individual to extend the repayment period thereby making payment obligation more manageable. It improves your credit situation by showing that you're taking steps to improve yourself.

Federal Direct loan consolidation earns a positive payment history thereby improving your credit rating. The loans that can be included in a federal consolidation process would be the Stafford loans, subsidized and unsubsidized (also called guaranteed student education loans), Perkins loans, PLUS Loans, federal insured student education loans, supplemental loans for students, health education assistance financial loans (HEAL), nursing student loans (NSL, and health professions student education loans.

There are certain benefits in consolidating a mortgage. It reduces the monthly payment up to 60%. Federal consolidation allows borrowers to secure current low rates thus protecting from future price increases. Other benefits include an improvement in credit score.

There are many loan counselors available to assist you with the application process when you're applying for a federal direct loan consolidation. The three easy methods to apply are - online, phone or mail. The consolidation process takes between 30 to 90 days.

Even though the federal loan consolidation releases a person from a burdensome situation, especially when the lent amount is large, there are certain disadvantages associated with consolidating your loans. On account of longer payment periods, the individual will have to pay more by means of interest.