A Direct Consolidation Loan has a fixed interest rate for the life of the loan.
The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent.
You’ll select a repayment plan when you apply for a Direct Consolidation Loan. You apply for a Direct Consolidation Loan through Student After you submit your application electronically at Student or by mailing a paper application, the consolidation servicer you selected will complete the actions required to consolidate your eligible loans.
If you select this option, you won’t have to begin making payments on your new Direct Consolidation Loan until closer to the end of the grace period on your current loans.
Borrowers have different needs, so there are several repayment plans—including income-driven repayment plans, which base your monthly payment amount on your income and family size.
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A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. Similarly, if you have Federal Perkins Loans and you are employed in an occupation that would qualify you for Perkins Loan cancellation benefits, you should not include your Perkins Loans when you consolidate.
There is no cap on the interest rate of a Direct Consolidation Loan.
Repayment of a Direct Consolidation Loan will begin within 60 days after the loan is disbursed (paid out).
Failing to make , as well as result in late-payment fees, which is why it’s so important you keep up with your payments until your consolidation loan has been finalized.
When you apply for a Direct consolidation loan, you will want to continue to make payments on your federal student loans right up until you receive notice from your federal student loan servicer that your loan has been paid off.
It also may lower your monthly payments by giving you as long as 30 years to repay.
While consolidating federal student loans may give you a much-needed break on your monthly student loan payments, that lower monthly payment amount comes with a price.
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. Once your loans are combined into a Direct Consolidation Loan, they cannot be removed.