Consolidating private loans into federal loans
While both options involve combining multiple loans into one, private loan consolidation is generally referred to as refinancing.This is because you’ll finance the new student loan based on a variety of factors, including your income, debts, employment and credit.
There are a variety of private lenders that offer student loan refinancing, each with different potential interest rates, loan terms and features. When you consolidate your student loans, you essentially combine multiple loans into one.If you extend your loan terms, you will have a lower monthly payment.Federal student loan consolidation doesn’t involve a credit check, you may be able to lower your monthly payment and there could be other benefits, such as being eligible for more repayment plans or forgiveness programs.Additionally, students must complete a Master Promissory Note (or MPN) which is actually a legal document that explains the contract between the related parties.All the terms and conditions of the loan are stated in clear terms in MPN as well.Those who wish to apply for a Federal Student Loan must fill in a Free Application for Federal Student Aid (or FAFSA) which can be done via the Internet.
Just include all the necessary documentations and information required.
Federal Student Loans or Direct Loans are part of the federal student aid administered by the UDS Department of Education.
These are special loans not offered via private lenders or companies but they are made in agreement between the student and the US Department of Education.
Federal Student Loans do have a fixed interest which is determined every July 1st.
There is a minimum fee incurred, which can be set up to 4%, which is used to offset the cost of managing the services of these programs.
Here are some additional requirements: If you just graduated with three federal Direct Subsidized loans, one for $10,000, one for $6,000 and one for $5,000, and you get a job earning $65,000 a year in San Francisco, you’ll pay off the loans in 10 years and pay a total of $27,409 once you start making payments under the Standard Repayment Plan.