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What is a Federal Consolidation Loan?

A Federal Consolidation Loan is a loan that repays all your outstanding eligible federal student loans, and replaces them with a single new loan with one loan payment. You may always prepay your loan with no penalties and there are absolutely no fees incurred when consolidating. The interest rate on the new consolidation loan will also be a fixed rate for the entire term.

Eligibility criteria for Federal Loan Consolidation are:

   1. You have graduated, left school or are attending school less than half time.
   2. You have at least $10,000 in eligible student loans you wish to consolidate.
   3. You can certify that you do not have a Federal Consolidation Loan application pending with another lender.

Minimum balance

You must have an outstanding balance of $10,000 in eligible student loans to consolidate under this program.

You can consolidate following type of loans

   1. Federal and Federal Direct Stafford (subsidized and unsubsidized)
   2. Federal and Federal Direct PLUS
   3. SLS (Supplementary Loans for Students)
   4. Federal Perkins
   5. Federal Nursing Student Loans (NSL)
   6. Health Professions Student Loans (HPSL)
   7. Loans for Disadvantaged Students (LDS)
   8. Federal Insured Students Loans (FISL)
   9. Federal Consolidation Loans
  10. Federal Direct Consolidation Loans

Defaulted loan Owners:- You may consolidate defaulted loans! Satisfactory repayment obligations.

New interest rate is:-

Your new interest rate will be weighted average of loans being consolidated.

Fees to consolidate :-

We pay all the fees, you don't have to worry about a dime!

Credit Check?

No credit checks are required to consolidate your loans.

Repayment options available to you

Choose Repayment options from the following :

   1. Equal Payment Plan – your least expensive option. Payments are fixed over the life of the loan and repay all principal and interest due each month.
   2. Graduated Repayment – can reduce your payments by more than 50% because you make small, interest-only payments at the beginning of repayment, and larger payments that include principal and interest later on. When you may be in a better position to afford them. You may choose from the following graduated repayment plans:
          * Select/2 Alternative – Interest-only payments for the first two years, followed by level payments for the remainder of the term.
          * Select/5 Alternative – Interest-only payments for 2 years followed by 3 years of payments that include interest and a portion of principal, followed by level payments for the remainder of your term.
   3. Income Sensitive Repayment – Your monthly payments are based on a percentage of your monthly income (4-25%) and can fluctuate annually with changes in your income. You are required to submit documentation to the IRS annually.

Switching of repayment option later on

Usually yes. Because federal law stipulates that your largest federal student loan payment on an account cannot exceed 3 times your smallest payment, you may be restricted from switching repayment options late in your consolidation loan repayment term.

Are deferments and forbearance allowed under a consolidation loan?

Yes, please refer to the Federal Consolidation Loan Deferment and Forbearance Benefits page for a complete description of deferment and forbearance eligibility rules.

Grace period on your consolidation loan

Once you have been notified that your consolidation loan has been disbursed, you will begin repayment within 60 days.

What about the subsidy on the Stafford loans consolidating

Borrowers who are eligible for interest subsidies on their underlying Stafford loans, will continue to receive subsidy benefits on the portion of the consolidation loan that repays the original subsidized Stafford loans.

How to apply

Apply Online Here ! You can complete the application no longer than 10 minutes. After that we will gather all the information on your existing loans from the Federal database and you can finalize the new loan online! Paperless, fast and easy... It's Simple!

Time to get loans consolidated

Is nearly 60-120 days. You only need to review your final application for completeness and we will disburse your new consolidation loan.

What do I do while my loans are being consolidated?

Continue to make regular monthly payments on your student loans! If they become delinquent or go into default, your consolidation loan will be delayed.

Who will I pay each month?

Once your loans are consolidated, you will receive a payment book containing all the information you will need about your new loan servicing center.

Pay loan consolidation electronically.

You may choose to have your monthly consolidation loan payments debited electronically from your checking or savings account. When you do, we'll reduce your consolidation interest rate by an additional .25%. To sign up for electronic payment, please refer to the disclosure statement you will receive when your consolidation loan is disbursed.

Prepay your consolidation loan

Yes, you may always prepay (pay ahead) your student consolidation loan. Just put a note in with your payment that specifies how much you wish to apply to principal and how much to interest.

I attended graduate school, am I still eligible?

Yes, as long as you have eligible loans you wish to consolidate. Most people who have attended graduate school have borrowed more for their education, and so have more to save by consolidating. Loan consolidation can help you lock in a very low interest rate, cut your payments by more than half and let you make a single payment for all your eligible student loans.

Consolidate, Parents PLUS loans for your child's education

You should take this opportunity to lock in a great rate on your PLUS loans, even if your child has not completed school. If you are borrowing for the current academic year (or have borrowed since July 1, 1998) your variable PLUS interest rate is 4.86% with a cap of 9%. Consolidation will let you lock in a rate of 4.875% on your PLUS loans for life. If you need to borrow PLUS funds again, you will be eligible to reconsolidate your consolidation loan with your new PLUS loans.


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