Consolidating your student loans can be one of the best things you can do in your repayment process. You should consolidate your loans under the direct program. The major advantages of having direct loans are they qualify for the Federal Service Forgiveness Program. If you have FFEL loans they do not qualify even though they are federal loans.
In addition to simplifying your loan repayment process, this will minimize the risk of default or missing a payment.
To complete the consolidation you will need the follow items:
- List of Federal Student Loans
- List of Loan servicers
- Loan Payoff amounts
- Two References that do not live at the same address
- Tax information
- Current Pay stub (if applicable)
- Employer Information
- Understand Repayment Options
At times the government systems can have errors. It is highly recommended that you verify your loans against the timing of your education attendance. In the national database, the date of the loan and the original loan amount is available. This amount should match up to your financial awards from your school if you accepted the entire financial award.
With the consolidation you can option to have automatic electronic withdraws which will reduce your interest rate by 0.25%.
A single interest rate will be created after you consolidate. This is a weighted average number based on your current outstanding balance and the interest rate associated with each of the loans.