If you are a student or new graduate, student loan debt should not be a new kind of thing for you in your mind. Having said that, if you have lots of student loan, student loan consolidation is always there to help you organize your whole debt into one shape. And you will have a good structure of repayment method, and you can efficiently operate your debt repayment. However, it takes time to get consolidation. This process might take a week or a month. The only thing you should do is to wait for the answer at the end. Keep in mind that, student loan consolidation does not consist of one type because there are two types of consolidation method you can choose.
Furthermore, both of them have different time of process when you start one of them. So there are two types of it which are federal direct loan consolidation and private loan consolidation. It does not matter which one you want to choose, and you have to wait for the approval and get your new loan. Before deciding, you can search and read about them to get more detailed information.
Federal Direct Loan Consolidation
In the first hand, we have federal loan consolidation. The U.S. Department of Education operates federal direct loan consolidation for students, and they do not have any service for private consolidation as well. This service works very simply. Federal direct consolidation takes all of your loans, reshape it into one single loan and provide a monthly payment method. May you think about any other benefits? Of course, they also offer some benefits for you which you never experience. First thing first, if you choose federal direct consolidation service, you will get access to the plans for income-driven repayment and Public Service Loan Forgiveness.
It does not have any credit check as well, for instance, if you can use this service you can have this benefit. In this case, federal direct loan consolidation gives you benefits, and it implies that as time passes you will need to pay more as well. If you have an interest in applying for federal direct consolidation method, you can go to studentloans.gov and if you already have an account for this service, log into your details to select this consolidation method. If you do not have an account for this one, register your details into the system which you will need to submit your permanent address, contact and income details. When you apply all of these requirements, the process will last a week or months and while you are waiting for the approval, do not forget paying your debts.
Pros and Cons of Federal Direct Consolidation
So we have covered up all process for the federal direct consolidation service. When we come to its pros, this service provides you get access to the Direct Loan program. Another one is, reshape your payments and make it monthly payments. Finally, it also includes an extension of the repayment period for you. What about the cons? Its results are for highest interests. When it gives you an extension of it, it means more interest in return.
Private Student Loan Consolidation
In the second place, we have a private loan consolidation method. It does not matter whether you have private or federal student loans, you can go to private consolidation service if you want. Sometimes this service is also called as refinancing for just making differentiate with federal consolidation service. However, there are also differences between them.
For instance, private student loan consolidation provides you fresh and less interest rate and this one will save your money eventually. To able to use this service, you will need to have a comprehensive credit and financial profile. There are several lenders that you can apply and how many you apply the more you will get a chance to get it. But how many days will it take? After you apply for the service, you will get a conditional acceptance by the system in a minute. The requirements for applying are not so hard to provide. You will need to submit your detailed information about your balance, employment situation and other documents that can increase your chance to be verified by the lender.
So you need a good credit score which might be between 690 and 850. And your employment history should be good because lenders firstly look at your employment situation. You also need to have an excellent repayment history because most private banks want to work with students who are low risks candidates. In this case, you should be faster because if you submit all the documents for them in a short time, your results will reveal rapidly. Generally, all of these processes can take a week or weeks. And do not forget that, if you choose private student loan consolidation you will lose all your benefits on your federal loan service in return.
Pros and Cons of Private Student Loan Consolidation
After an explanation of the pros and cons of federal student loan consolidation, it might be better to cover up all the pros and cons of a private one. So what are the advantages of it? Well, the possibility of getting less interest rate, having cosigner can help you get lower interest rate and as well as federal student loan consolidation, you can operate your loans as a monthly period. What about the cons of it? You will need to be eligible for that because there are restrictive requirements as well. As it is mentioned above, you will leave your federal consolidation benefits. Finally, if you are willing to change your monthly payment, you need to loan refinancing again.
If you have a plan for private consolidation service, be sure that you research all services in this area and find a more appropriate one which has suitable features and rates for you. On the other hand, if you want federal loan consolidation, there will be the highest rates and some obstacles. You should search a lot about features and benefits of both services such as federal and private consolidation. Because it is obvious that choosing one service can cost your losing benefits and features of another one, so keep in mind that, choosing private loan consolidation will cost you lose all your benefits from federal one and you will no longer use the benefits of federal loan consolidation.
Consequently, you should do significant research to know that if there are differences if you switch your loan consolidation service from one to another. If there is no difference, you do not need to change it. So it does not matter which one you want to choose, research the whole services on the internet to be sure that you will get the most comprehensive and appropriate one for your interest.
What do you think, now? Is this service for you? No doubt that having student loan debt is an essential thing that you have to worry about. Student loan consolidation can help you to handle your loans whether it is a federal or private loan. As it is mentioned in the article that, applying for the loan consolidation service can take time, but if you want to solve this problem and save your money you should consider loan consolidation.