Benefits consolidating direct loans
CFDA Number: 84.268 Program Type: Loans Also Known As: Direct Loan program; Direct Loans.Direct Loans includes four components: Direct Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.We put together this guide to help you get information on all of the top student loan refinance lenders without having to jump around multiple websites.After you are done, you will know how to refinance and consolidate student loans. You may now have a general idea of how to refinance student loans and how to consolidate student loans, as well as the basics of what each lender offers, but there is much more information you should know before choosing a lender.With an average balance of ,400, student debt is a big part of the average college graduate's life.
A loan that combines two or more federal education loans into a single loan. Department of Education and does not require borrowers to pay an application fee.
In the process of consolidation, each original loan is paid in full and a new Direct Consolidation Loan is originated for the combined balance of the consolidated loans.
ED determines the interest rate of the Direct Consolidation Loan by taking the weighted average of the interest rates on your existing loans and rounding up to the nearest 1/8 of a percent (0.125).
Once the loans are rolled into a new loan, those benefits are lost.
Additionally, if the new loan increases the repayment period, the borrower may wind up paying more interest.
Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed.