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Consolidating private school loan credit

If you’re having a tough time juggling multiple student loan payments, consolidating them may be the way to go. If you have questions about consolidation before you apply, you can contact the Education Department’s Loan Consolidation Information Call Center at 1-800-557-7392.

When you apply, you select a student loan servicer and a repayment plan (learn more about Any questions you have about your loan application should go to the student loan servicer you selected for your consolidation loan.

You can apply electronically or get a paper application.

It also may lower your monthly payments by giving you as long as 30 years to repay.

While consolidating federal student loans may give you a much-needed break on your monthly student loan payments, that lower monthly payment amount comes with a price.

By increasing your loan repayment period, you’ll have more payments to make and will end up paying more in interest.

Consolidating private school loan credit

There are no prepayment penalties with a Direct consolidation loan, so feel free to pay more when you have the extra cash — it’ll help you save on interest. According to the Education Department, federal loans eligible for a Direct consolidation loan include: Subsidized and unsubsidized Direct loans, subsidized and unsubsidized Stafford loans, Direct PLUS loans, PLUS loans from the Federal Family Education Loan (FFEL) Program, Supplemental Loans for Students (SLS), Perkins loans, Health Education Assistance Loans (HEAL), federal nursing loans and some existing consolidation loans.

A Direct consolidation loan has a fixed interest rate.

The loan rate you will pay is based on the weighted average of the interest rates on the federal loans that you consolidate, rounded up to the nearest one-eighth of 1%.

Once you consolidate your federal education loans into a Direct consolidation loan, there is no going back.

When you consolidate your loans into one new loan, all your previous student loans are paid off.

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