Debt Consolidation Help for Your Student Loans
Contributed by Deb Powers
Debt Consolidation Help for Your Student Loans
The U.S. Government offers a plan that can help you manage your student loan debt by with a Federal Direct Consolidation Loan. Whether you're a recent graduate, midway into your career or still in school or in your grace period, a debt consolidation loan from the federal government may lessen the amount you need to repay, or increase the length of time that you have to pay off your current debt.
How can a federal debt consolidation loan help you lower your debt?
If you have student loans under several different programs, bringing them all together under one Direct Consolidation Loan can make your debts easier to manage. By combining all your loans into one, you're only responsible to make one payment to one lender - the U.S. Government. To help make the option of debt consolidation more attractive, there are four flexible payment plans available, including two that take your income and/or income expectations into account.
A Direct Consolidation Loan is available to help manage your debt even if you're still in school or in your grace period. If you choose to consolidate all your debts into one before you finish school, you can lock in an interest rate that's as much as .6% lower than if you attempt to refinance later.
For an idea of how a Federal Direct Consolidation Loan can help lower your payments and manage your debt, you can visit the Department of Education's web site and make use of their online debt calculator at https://loanconsolidation.ed.gov/loancalc/servlet/common.mvc.Controller? controller_task=startCalculator to estimate your projected monthly payment under the various plans.
Can a Federal Direct Consolidation Loan help you manage your debt?
There may be reasons why debt consolidation is not the right choice for you. If you're close to the end of your repayment term, for instance, it may not be worth the work to consolidate. Extending the life of your loan is likely to make the amount you pay greater overall. If you can afford the higher monthly payments to pay it off sooner, you can save money in the long run.
