Federal programs
There are two federal student loan consolidation programs in the usa that allow a student to consolidate all student loans into a single loan:
A brief history of the government program
The federal student loan consolidation program was created in 1986 to allow graduates with several federal loan to consolidate them all into one solitary loan package. Such consolidated loans had a variable rate of interest from 1986 to 1998 but in 1998, the us congress acted to convert the variable rate to 1 of a fixed rate weighted average. The latter arrived to force on February 1, 1999. Before this time, a consolidated student loan from federal government used to possess a variable rate. That rate was determined by either the university or the lending company, whoever is the loan originator.
Interest implications
When compared with student loans provided by federal government, the term of payment for federal loan consolidation loans is longer. It can range anything from 10 to thirty years. Even though monthly repayments are reduce, the overall cost of the term of the loan is really higher than with other federal student loans.
Don't rush to decide
if you've existing loans that cost you considerable money, despair not really. Consolidating your loans may be the way to proceed. However, it is important to appreciate the fact that federal education loan consolidation is not always suitable for every borrower with federal education loan payment.
There are two federal student loan consolidation programs in the usa that allow a student to consolidate all student loans into a single loan:
- The federal family education loan program
- Federal direct student loan program
- Stafford loans
- In addition loans
- Perkins loans
A brief history of the government program
The federal student loan consolidation program was created in 1986 to allow graduates with several federal loan to consolidate them all into one solitary loan package. Such consolidated loans had a variable rate of interest from 1986 to 1998 but in 1998, the us congress acted to convert the variable rate to 1 of a fixed rate weighted average. The latter arrived to force on February 1, 1999. Before this time, a consolidated student loan from federal government used to possess a variable rate. That rate was determined by either the university or the lending company, whoever is the loan originator.
Interest implications
When compared with student loans provided by federal government, the term of payment for federal loan consolidation loans is longer. It can range anything from 10 to thirty years. Even though monthly repayments are reduce, the overall cost of the term of the loan is really higher than with other federal student loans.
Don't rush to decide
if you've existing loans that cost you considerable money, despair not really. Consolidating your loans may be the way to proceed. However, it is important to appreciate the fact that federal education loan consolidation is not always suitable for every borrower with federal education loan payment.
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