Consolidation of School Loans

Consolidation of your school loans offers you the ability to reduce your school loans to one lower monthly payment. Your school loans can be refinanced and combined into a new loan.

Why should you consider consolidating your school loans? Even though you can make your current shool loans monthly payments, you might want to consider consolidating your school loans to free up money for bills that have higher interest rates and to lower your monthly payments.

The Higher Education Act (HEA) provides you with a school loan consolidation prorgram under both the Direct Loan Program (DLP) and the Federal Family Education Loan (FFEL) Programs. With both of these consolidation programs, a students loans are paid off and a new school consolidation loan is established.

These loan consolidation programs can simplify your loan repayment by putting together several types of Federal education loans, that might be from different lenders and have different repayment schedules, into one new loan. The interest rate on a consolidated loan may be lower than any of the other loans. Also, in most cases, the monthly payment on a consolidation loan is usually lower and the time to repay the loan may be extended beyond what was offered by any of the seperate loans.

Perhaps the best time to consider consolidation of your school loans is right after you have graduated. It is during that time that you will have the best chance of getting the lowest interest rates and best repayment terms. Remember the goal of consolidation of your school loans is to end up with just one loan with one monthly payment. Before you decide on which school loan consolidation is best for you, make sure that you spend the time to visit different federal and private school loan consolidation companies and get familiar with their school loan consolidation offers.