Federal Consolidation Loan

Federal Consolidation Loan

By Ricky Lim

The federal consolidation loan program will consolidate together all the loans of the student into a single student consolidation loan and reduce the hassle of payment to multiple lenders.

Learn More About Federal Consolidation Student Loan

The support of the federal government permits a student to extend his terms of payment. In case an individual has indebted Stafford loans, he or she has a variable rate of interest, which is adjusted annually.

There are several financial institutions providing federal consolidation loan and the student can simply choose the best among them. Sallie Mae, one of the government institutions, claims to make available the best rates possible for student loans. If the rates of the loans of a student are variable and he has completed his graduation, the grace period granted for consolidation is six months.

Like each loan option, the federal consolidation loan does have a drawback. The repayment of federal government student loan consolidation can be of two types - income repayment and graduated repayment. That is to say, repayment is increased with the increase in income.

In the US, there are two types of student loan categories available: the federal student loans and the private student loans.

The federal student loan consolidation will help a student combine all his loans into a single one with a very low interest rate. A student can ask for a federal consolidation loan from various financial institutions each offering great loan packages.

Even so the federal consolidation loan offer the following beneficial features:

- Interest rate - the rates offered by the federal consolidation loan is considerably lower than any other private loan plan.

- Monthly payments - the monthly payments are now affordable and won't endanger your budget

- Single loan - each month you'll have only one payment to make.

If a student is not enrolled in any school and has repaid any other previous loans in time or he is in grace period after post graduation then he is eligible for federal consolidation loans.

The students that already have federal educational loans are eligible also for consolidation loans. The student debt consolidation loan doesn't include the private education loans. If the student does that, he'll only lose its advantages offered by a federal consolidation loan.