Graduate and get a federal consolidation loan

One of the perks about federal consolidation loans is that you used to be able to apply for them while you were still in college. Unfortunately, this is no longer the case. You now have to wait until you've either graduated or have stopped attending school less than part time. Once this occurs then you're cleared to go searching through the plethora of federal consolidation loans that are available.

Federal consolidation loan eligibility

As far as eligibility for federal student loans goes, if you have multiple outstanding loans you can consolidate, provided that you meet the requirements mentioned above and that all of your loans are in good standing, meaning that you make your monthly payments on time, or if you've been having trouble making them, then you've at least been working with the lenders to make some kind of payment. In fact, this last situation may be exactly why you need to consolidate your outstanding federal loans.

Repayment term helps not interest rate

The biggest concern most people have about federal consolidation loans is what the interest rate will be. The interest rate is determined by the weighted average of all of your outstanding federal loans and is established at a fixed rate that cannot exceed 8.25% by law. However, the interest rate shouldn't be your biggest worry because it is not the main factor that provides you with a lower monthly payment when you consolidate. The repayment term is what makes your monthly payment lower. Federal student loan consolidation lengthens your repayment term from the usual 10 year term to as long as 25 years. In effect, your monthly payments are lower in the short term, but you will be paying much more in the long term.

Interest amount is negligible

The total cost of loan consolidation is generally negligible when you consider the benefits it provides you near term. You have to ask yourself one thing: are you really going to notice how much money you spent in interest on a loan? Most likely not. However, if this still bothers you, then you can always pay more towards the loan because there are no repayment penalties for doing such a thing.

Federal consolidation loans

Anyone with outstanding federal loans should consider a federal consolidation loan. It will simplify your life by simplifying your bank account. There is really no excuse for not consolidating.