What is a Consolidation Loan?
A consolidation loan is a federal loan that can make repaying your student loans simpler and more affordable. It allows you to combine all of your eligible federal student loans into one new loan with a single monthly payment. If you are a borrower in grace or repayment and need to reduce your monthly expenses, you may want to consider a loan consolidation.
A consolidation loan pays off the outstanding combined balances for one or more federal student loans and creates a new single loan with a fixed interest rate. One lender holds the loan and you make one monthly payment. The Repayment terms depend on the amount consolidated, the type of payment plan you choose, and the length of the loan term. The following information can help you decide whether loan consolidation is the right decision for you. What loans can be consolidated? • Stafford Loans • PLUS Loans • Perkins Loans • Health Professions Student Loans (HPSL) • Health Education Assistance Loans (HEAL) • Nursing Student Loans (NSLP) • National Direct Student Loans (NDSL) • SLS Loan (formerly ALAS Loans) • Federal Insured Student Loan (FISL) Note: In general, you can consolidate only once and some loans may not be eligible for federal loan consolidation. Check with your lender if you have a loan different from ones listed here. Not sure what kind of loans you have? Go to the National
