Consolidating ffelp loans into direct loans
Notice how the weighted average is between the highest and lowest interest rates among the consolidated loans.The use of the weighted average preserves the cost of the loans.Your fixed rate is determined by weighing the average interest rate being applied to your existing loans that are eligible for consolidation, and then rounding this rate up to the nearest one-eighth of one percent.Please note, there is no interest rate cap on a Direct Consolidation Loan.To consolidate defaulted federal loans, the borrower must either rehabilitate the defaulted loans by making three consecutive, full and on-time monthly payments or agree to repay the consolidation loan under an income-driven repayment plan. Borrowers may consolidate their federal student loans after they graduate or drop below half-time enrollment.Thus, borrowers can consolidate only during the grace and repayment periods, but not during the in-school period.
However, if you are still within the grace period for any loans being consolidated, you may be able to delay making payments until the grace period has ended by speaking with one of our student loan specialists.
These requirements include: Also, if you already have an existing consolidation loan that you’re looking to consolidate with other loans, one of the loans may need to be one of the eligible federal student loans listed above.
However, FFEL Consolidation Loans may be qualified for re-consolidation without additional eligible loans included, in certain situations.
The first step in determining your eligibility for Federal Student Loan Consolidation, also known as a Direct Consolidation Loan, is having a loan that qualifies under the U. However, you could be eligible for a Private Student Loan Consolidation, which usually offers the same benefits.
In addition to having one of the above loans, you will also need to meet other conditions for consolidating your federal loans through the Department of Education.The individual loans in the previous example involve monthly payments of 1.02 and .03, respectively, on a 10-year term, or a total of 4.05 a month.