How to consolidate student loan debts is a question asked by almost everyone who has a student loan. The most common answer to this question is that you consolidate all your loans into one big loan with a single payment each month. However, this is not entirely true. While it is true that you can get lower interest rates and a longer grace period on your loans, you also run the risk of paying the balance in full. If you want to know how to pay off student loans, you need to understand how consolidating your loans will affect your credit in the long term. In fact, a great Lakes student loan consolidation may be exactly what you need to help you re-establish your credit.
When you consolidate, you are getting rid of multiple payments. Each payment becomes just one payment with a much lower interest rate. You can also take advantage of a longer grace period when you repay your student loan debt with an income-driven repayment plan. This means that you will be making smaller monthly payments while you concentrate on increasing your income and managing your debt.
Now let us look at how to pay off student loans with forgiveness programs. When you consolidate your loans, you have two choices-to use standard debt repayments or to use a forgiveness program. For most types of federal loans, you qualify for both. In fact, forgiveness programs are specifically designed for graduates who are suffering from overwhelming student loan debt.
Generally speaking, the two types of consolidation loans that are eligible for forgiveness are those that are in repayment plans with the Federal Government. Direct payments made directly to the Department of Education are eligible. Your lender will forgive the remaining balance of the amount owed on the loan is more than 10% of the value of the loan. Plus, this doesn’t apply if you have made any payments made on the loan before the forgiveness period started; even then, you may still be eligible for this benefit.
There are also loans that are not government-guaranteed. Loans which you took out with private lenders are not eligible. These include bank loans and private loan debt accrued during your schooling years. If you are unsure whether a particular loan is eligible, contact your lender and ask. They will be able to tell you whether or not you are eligible to apply for forgiveness.
With the forgiveness option, your original balances will be repaid. However, the payments will be lower than what you were paying prior to consolidating your loans. You may also qualify for additional assistance, which will help you with the repayment process. To qualify for student loan forgiveness, you must meet certain criteria. If you do not, you may still be eligible for the program, but you need to prove that you are eligible yourself.
In order to find out how to consolidate student loans with federal assistance, you can contact the U.S. Department of Education or visit their website at: fdce dot gov. This is where you will locate a centralized student loan repayment program that offers you the assistance you need. The specific laws governing this program will vary from one district to another. Contact your lender to learn more about the specifics.
Knowing how to consolidate student loans with federal direct consolidation loan forgiveness can save you a lot of money over the life of your loans. If you qualify, you can often get a better interest rate, lower monthly payments, and even the possibility of tax credits. You can also benefit from a streamlined payment process and the reduction of fees, penalties and accumulated interest costs. Some lenders also offer repayment programs that allow student loan borrowers an extra month or two of grace time, which can be particularly helpful if you are struggling with repayment and are feeling financially stretched. With some careful research, you can find the best options for you, so that you can enjoy the peace of mind that comes with knowing you are making the right student loan repayment choices.