How to Apply for Government Loan Consolidation
It took seven government loans for you to complete your degree and now you have seven payments due on seven different dates each month. Individually the payments are minimal, but together they leave little wiggle room in your budget. A colleague mentioned that his sister lowered her payments by consolidating her loans and now gets only one bill monthly. It is not a single afternoon's undertaking, but with a bit of preparation and research, it's easy to apply for government loan consolidation.
Other People Are Reading
Things You'll Need
- Loan statements
- Loan coupon books or bills
- Lender's website addresses
- Government student aid PIN
- Two references
Instructions
-
-
1
Determine whether consolidating your government loans will benefit you. Crunch the numbers; if your goal is to lower your monthly payments or reduce the number of checks you write, consolidation can be the answer. Weigh the long-term ramifications. "Consolidation might actually cost you more over the life of the loan," warns Carol Stack, co-author of "The Financial Aid Handbook: Getting the Education You Want for the Price You Can Afford."
-
2
Make sure you meet the government requirements for loan consolidation. In addition to having more than one loan, applicants must have made three consecutive on-time payments or must submit their application within the six-month grace period.
-
-
3
Go to the Direct Consolidation Loans website (see Resources) and click on "Borrower Services." Go to Step 1, scroll down to the middle of the section and click "Check the Current Interest Rates." Ensure they are in line with your needs and goals.
-
4
Ensure you have your loan statements, loan coupon books or bills, your lender's website addresses, your government student aid PIN and two references. Return to the previous page. Go to Step 2, click on "Apply Online and E-sign Your Promissory Note" and complete the forms. Double-check your entries; sign and submit the application and promissory note.
-
5
Peace of mind. Print the confirmation for your records. Make sure you keep your loan payments current throughout the four to six weeks it will take to process your government loan consolidation.
-
1
Tips & Warnings
Use the online calculator provided by Direct Consolidation Loans (see Resources) to help identify the terms and payment plan that will best fit your needs.
Check with reputable private lenders like Chase, Wells Fargo and your credit union. The government is not your only consolidation option, and taking time to do the research may well net you better interest rates or terms. Avoid loans that charge origination fees or prepayment penalties.
You may qualify for the Stafford Loan Forgiveness program. Investigate before you consolidate (see Resources).
References
Resources
- Photo Credit David Sacks/Lifesize/Getty Images Jupiterimages/Goodshoot/Getty Images
