Consolidating sallie mae loans and direct loans


07-May-2016 06:58

Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.

When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%.

As part of the process, you’ll need to provide details about your existing federal student loans, and choose a federal loan servicer and repayment plan for your new consolidation loan.

You have to complete the application in a single session, so do your research before you start. You can consolidate all your federal loans or just some of them.

Additionally, Sallie Mae used to offer private loan consolidation but does not offer this option anymore.

Students can still consolidate private loans through the use of a private financial institution.

You can consolidate all, just some, or even just one of your student loans.

Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.

When you apply, most banks and lenders will look at your credit score, annual income, savings, and college degree type (or certificate of enrollment if still in school).

So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.

Additionally, you’ll get a new loan term ranging from 10 to 30 years.

Direct consolidation loans are now the only type of federal student consolidation loan.

Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.This report was not chartered by or created on behalf of any lender listed below.