Why use federal loan consolidation?
For most people who qualified to get federal educational funding, a big percentage of them still struggle to make ends meet.
Federal loan consolidation allows term extensions and unifications of:
* Stafford loans
** PLUS Loans
*** Federal perkin loans into one single loan.
Term extensions are between 10 --30 years. That means a lighter monthly repayments for the student, although consequently the total amount paid over the term of the loan is higher than would be paid had they been separated into individual loans.
So where do you avail of federal loan consolidation services?
In the United States there are two agencies serving the purpose, they are the Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FDLP)
What are their interest rates?
One great benefit federal student loan consolidation is that they have fixed interest rates compared to ordinary loans.
Specifically here are the numbers:
The fixed interest rate is calculated as the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%, and capped at 8.25%.
*Stafford Loans- lower interest rates loans (compared to typical private loans) only offered to the brightest students
joining accredited American institutions of higher education, who can qualify on their strict eligibility requirements
**PLUS Loans - loan offered to parents of students enrolled in qualified programs in post secondary institutions
***Federal Perkin Loans - is a need-based student loan offered by the U.S. Department of Education to assist American college students in funding their post-secondary education.
Kyle Black is a writer and researcher in many fields including the financial markets. Save thousands of dollars today and avoid unnecessary interest rates and bad financial decisions.
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