Benefits

• Lower monthly payments. Using a Federal Consolidation loan, you may be able to lower your monthly payments, in some cases cutting your monthly payments in half.
• Extended repayment period. Depending on your total education debt, a Federal Consolidation loan may permit you to extend the repayment term - in some cases up to 30 years - if you wish. View the maximum repayment periods for consolidation loans.
• Simplified paperwork that saves you time. With a Federal Consolidation loan, you can enjoy the convenience of a single monthly payment, one check to mail and a single point of contact.
• The possibility of even lower interest rates for borrowers still in their grace period. Interest rates on Stafford loans issued between July 1, 1995, and June 30, 2006, are 0.6-percentage points lower for borrowers who are in their six-month post-school grace period than for borrowers in repayment. So, by consolidating these loans during the grace period, you could lock in an even lower rate. You will lose the remainder of your grace period unless you instruct your lender to hold disbursement of your consolidation loan until the end of your grace period.
• Fixed interest rates. Although rates on Federal Stafford and Federal PLUS loans issued prior to July 1, 2006, vary each year, the interest rate on a Federal Consolidation loan is fixed for the life of the loan. Consolidation rates are based on the weighted average of the interest rates of the loans you want to consolidate, excluding Health Education Assistance Loans. The resulting rate is rounded up to the nearest one-eighth of 1 percent. The rate never can exceed 8.25 percent. Calculate the interest rate on a consolidation loan based on the rates on your current loans.
• No prepayment penalties. You have the flexibility to prepay your Federal Consolidation loan in full or in part, without penalty, any time during the life of your loan.