Questions about Student Loans

Several students want several questions answered before they decide whether or not to consolidate student loans. There are many different things to ask yourself before you make a decision that will affect the remainder of your financial future. There are several things to keep in mind before you decide how you will go about the process. For instance, students want to know if there is a way to unconsolidate loans once they are consolidated. Actually, the original student loans are paid in full and cannot be re-created. Once consolidation begins, there is no way to reverse the process.

Students are curious as to whether they can keep making payments on my student loans while they are waiting for their Federal Consolidation Loan to be processed. They can continue to make all regular payments. You will receive a repayment disclosure, which will include your repayment schedule when your Federal Consolidation Loan is completed.

People also want to know how long it will take for the application to be processed. Depending on the number and type of loans you currently have, it takes approximately six to eight weeks.

Students are curious as to how the interest rate is calculated as well. The interest rate for a Federal Consolidation Loan is set according to federal law and is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. This rate is fixed for the life of the loan and cannot exceed 8.25%.

People often ask how they can consolidate loans with the grace rate. You have the option of consolidating your loans during your grace period and taking advantage of the grace rate, which is sixty percent lower than the repayment rate for loans disbursed prior to July 1, 2006. It is important to remember that when you consolidate your loan in the grace period, you will be waiving the remainder of your grace period and your loan will immediately enter repayment. In order to receive the grace rate on your Federal Consolidation Loan and still take advantage of as much of the six-month period as possible, you should submit your application at least sixty days before your grace period terminates.

In addition, people ask how they know if they are eligible for a Consolidation Loan. If all of your federal loans are in grace, repayment or in a deferment/forbearance, you may be eligible for a Federal Consolidation Loan. Your loans that are in an in-school status cannot be consolidated until you graduate or leave school. If you have defaulted on any of your loans, you need to make satisfactory payment arrangements with your current holder, and provide evidence of that to your lender.

Students want to know where they apply for a Consolidation Loan as well. They can go to various lenders offer Federal Consolidation Loans for your eligible loans, including Federal Direct Student Loans.