Direct Student Loan Consolidation 101

Having the best education possible is very important for all young people. But today it can be very costly as prices rise every single year. To be able to cover the costs most students will take out a student loan, but upon graduation it can be difficult to be able to keep up with the repayments on this debt. For this reason it is now possible to acquire direct student loan consolidation.

This service can offer you a solution whereby you will be provided with a new loan that has a lower interest rate. It will take away a lot of the concerns that you may have regarding your debts as it will turn all your loans into one manageable amount. It also will improve your credit rating allowing you to have piece of mind that you do not have a bad financial reputation.

The direct student loan consolidation program is run by the US Department of Education. As it is a government orchestrated scheme there are a number of inherent benefits that are provided to the graduate.

If choosing to directly consolidate your loans the government will provide you a loan that suits your circumstances and needs. The interest rate will not be astronomical. It is fixed at a maximum of 8. 25%, or lower if the loans you are consolidating have less of a rate.

Through the consolidation of your loans you can often increase the duration given to make full repayment; this can be up to thirty years. To be able to qualify for the service you need to already be in a situation that involves paying back a student loan or loans. It is important to note that there is no minimum debt that is to be held in order to be eligible for this government sponsored scheme.

There are now four different repayment options. You should study the details and choose which is best for you –

1. Standard Repayment Plan: If you choose this option your monthly repayments will be a minimum of $ 50 per calendar month for between ten to thirty years.

2. Graduated Repayment Plan: With this option the monthly amount that is required has to be equal or more than the monthly interest on the money. It is possible to start with low repayments but then it will be recalculated every couple of years.

3. Extended Repayment Plan: To qualify for this particular plan the debt you hold has to be larger than $ 30, 000. You are given a period of twenty five years to make full repayment.

4. Income Contingent Repayment Plan: Here, the monthly repayments are calculated on the graduates income, loan balance, and family size.