Loan Consolidation
Loan Consolidation is the paying off of multiple loans with one new loan. Borrowers may consolidate for one or any combination of reasons: 1) for convenience, 2) to improve monthly cash flow and 3) to obtain a fixed interest rate. Loans must be in repayment or in the grace period before consolidating.
The following loans can be consolidated:
- Federal Supplemental Loan for Students (SLS)
- Federal Stafford Loans (Subsidized and Unsubsidized)
- Federal Perkins Loans
- Federal Parent Loan for Undergraduate Students (PLUS)
- Federal Graduate PLUS Loans
- Guaranteed Student Loans (GSL)
- Health Education Assistance Loans (HEAL)
- Health Professions Student Loan (HPSL)
- Loans for Disadvantaged Students (LDS)
- Nursing Student Loans (NSL)
If you wish to secure a Federal Consolidation Loan, you should first consult any or all of your current lenders, such as the bank from which you borrowed your Federal Stafford. The rate of interest will be the weighted average of the rates of the original loans rounded upward to the nearest one-eighth of one percent and fixed for the remainder of the repayment period. This fixed rate may never be higher than 8.25%. During deferment the Subsidized Stafford Loans that were consolidated continue to be interest free. There is no fee to consolidate. Generally, the first payment is due within 60 days of disbursement unless you are eligible for a deferment.
