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Loan Consolidations

The Federal Direct Student Loan ProgramNew window icon (FDLP) offers borrowers with multiple federal loans and high balances the opportunity to consolidate (combine) those loans into a single federal loan with one, usually lower, rate of interest. Some private entitiesNew window icon also offer consolidation loans for private education loans.

Consolidated loans typically involve repayment over a longer period, which reduces the monthly payment to a manageable amount. The extended repayment period sometimes also leads to a higher total amount to repay over the term of the loan, due to accruing interest. Loan consolidation can offer the following benefits:

  • Reduce the number of loan payments you must make each month
  • Lower your total monthly education loan payment amount
  • Help you avoid loan default or poor credit rating
  • Help you return a defaulted loan to good standing

Some features of the original loans, such as grace periods and special forgiveness clauses, may not be a part of the consolidated loan. Terms of consolidated loans should be examined carefully to ensure that the benefits exceed the costs for the individual borrower.

Read comprehensive loan consolidation informationNew window icon for federal loans to see whether this might be the best option for you.