Comparing the Different School Loan Consolidation Programs
When youre looking for a school loan loan consolidation to combine your many student loans into 1 payment, there are a lot of rules that you must stick to, especially if your lending options are federal lending options. Here, we describe some of these rules to help you navigate the school loan loan consolidation maze.
There are two diverse school loan consolidation programs namely, the Federal Loved ones Education Loan (FFEL) and the Direct Consolidation Loan programs. Its crucial that you know the difference between the two. First, any university loan consolidation that you want mixed have to be accepted through the Direct Consolidation Loan Program. Federal Family Education Loan lenders might take all eligible lending options for the FFEL consolidation, however, many lenders might not contain non-FFEL loans in the college loan consolidation. However, if your loan isnt accepted in the Federal government Family Education Loan loan consolidation program, lenders may well offer alternative school loan consolidation programs because of these debts.
School loan consolidation lenders under the Federal government Family Education Loan plan must offer a number of repayment programs. These include the standard repayment plan, the particular graduated repayment plan, a prolonged repayment plan, and an income-sensitive repayment plan. Keep in mind that although these four repayment plans are offered by all FFEL lenders, the actual specifics of the repayment may differ. For example, the income-sensitive repayment plan takes the borrowers earnings and total financial debt load into account.
With all the Direct Loan Program, you’re offered the standard repayment schedule, the graduated repayment schedule, the extended repayment plan, and the income-contingent repayment plan. Using this income-contingent repayment plan, the transaction is based on a formula that can the borrowers income, family members size, and total loan amounts into account.
If you default on an FFEL loan consolidation loan, some lenders may allow you to include the past due loan into a new loan consolidation loan. However, not all lenders will offer this option. The actual Direct Loan Program also offers stipulations for joining together defaulted loans into new loans. If you are eligible to consolidate your own defaulted loans right into a new loan, you will restore eligibility for government student aid.
Beneath the Direct Consolidation Plan, you may consolidate your own loans while you are participating in school. If you are qualified to receive an in-school consolidation, you can get a six month grace time period before repayment starts. You might also qualify for a lesser interest. If you have simply FFEL loans, you might still be entitled to consolidation and grace period while still in school through the Immediate Consolidation Loan program. With all the FFEL consolidation program, you are able to only consolidate your own loans after leaving school, and all the loans have to be inside the grace period or repayment period.