How Loan Consolidation Works

Anyone who meets certain
requirements and has student
loans can consolidate their
loans into a single loan. This
means that the lender will
pay off all of the existing
student loan amounts you
still owe and combine the
amount you owe into a
single loan. By doing this,
most people will see their
monthly payment on student
loans drop dramatically.
And that’s exactly what you
want, a more affordable way
to pay off your student loans.

Both students, and parents who have taken out PLUS loans for their students, can consolidate their loans. Consolidation of federal student loans does not require that you need to have your credit checked to see if you qualify. Surprised? That’s right. Your credit score does not disqualify you from getting a federal student loan consolidation.

Be sure that you know whether your loans are federal student loans or private student loans. Federal student loans are backed by the federal government and have names like the Perkins Loan, Stafford Loan, PLUS (Parent Loan for Undergraduate Students) and loans from the Department of Education.

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] There are also other types of federal student loans, so be sure to check your student loan report to verify what type of loan you have.A private student loan is a loan that you or your parents took out and it is not backed by the government.

To consolidate with most lenders, you have to:

• Have at least $10,000 in student loan debt
• Be in your grace period or repayment period
• Not be in default status on any of your loans
• Be a U.S. resident or permanent resident
• Not have consolidated the same loans before, or have gone back to school and accrued more loans to consolidate with the original consolidation

If you were afraid that your credit would keep you from getting a student loan consolidation, or that it would be a long drawn-out process to apply, we’re here to tell you that that’s not true. It’s probably one of the simplest loan processes you’ll ever experience. You’ll wonder why you waited so long.