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Under the program, a borrower can consolidate subsidized and unsubsidized Stafford loans, Supplemental Loans for Students, Federally Insured Student Loans, PLUS loans, direct loans, Perkins loans and just about any other type of federal student loan. Here's what borrowers need to know about a direct consolidated loan.
A direct consolidation loan is a type of federal loan that combines two or more federal education loans into a single loan with a fixed interest rate based on the average rate of the loans being consolidated.
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. Direct consolidation loans are now the only type of federal student consolidation loan. Interest rates for consolidation loans are fixed.
Direct loan consolidation allows borrowers to take advantage of different income-based repayment programs, which can lead toward loan forgiveness, depending on the borrower's repayment and circumstances. But unlike some private loan consolidations, direct doesn't offer lower interest rates through consolidation.
A direct consolidation loan is a type of federal loan that combines two or more federal education loans into a single loan with a fixed interest rate based on the average rate of the loans being consolidated.
Consolidation Loans combine several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. They also provide an opportunity for alternative repayment plans, making monthly payments more manageable.
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. Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed. Interest rates for consolidation loans are fixed.
Federal student loan consolidation combines multiple federal loans into a single federal loan through the Department of Education. You may need to consolidate to be eligible for some federal loan repayment programs, but federal consolidation won't lower your interest rate. It may lower your payments by extending them.
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