Department of education consolidating private loans consolidating canada student loans
With just a few exceptions, you get only one chance to consolidate with the government loan programs.
WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.
Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.
As you weigh the pros and cons, keep in mind that timing is critical.
In the process of consolidation, each original loan is paid in full and a new Direct Consolidation Loan is originated for the combined balance of the consolidated loans.
ED determines the interest rate of the Direct Consolidation Loan by taking the weighted average of the interest rates on your existing loans and rounding up to the nearest 1/8 of a percent (0.125).
Even if you have only one defaulted student loan, you may obtain a Direct Consolidation Loan to resolve the default.When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%.So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.At Lend EDU, we help borrowers compare the top student loan companies in one place.We put together this guide to help you get information on all of the top student loan refinance lenders without having to jump around multiple websites.
Your defaulted federal loan may be consolidated provided that it’s not a previous spousal consolidated loan and you are not subject to a judgment secured through litigation or an order of administrative wage garnishment on a federal student loan for which you’re requesting consolidation.