What a direct loan is

Are you aware that there is a difference between a federal student loan and a federal direct student loan? There is, which means that there also a difference between federal student loan consolidation and federal direct student loan consolidation.

Source of federal direct student loans

A federal direct student loan is one which you receive directly from the government, while a federal student loan is still from the government, but a private lender acts a sort of intermediary. Nevertheless, if you have multiple outstanding federal direct student loans you will want to explore the option of consolidating them upon graduation, or upon leaving school.

Consolidation functions

Federal direct student loan consolidation allows you to compile all of your outstanding federal direct loans and combine them into one bigger loan so that you only have to make one monthly payment, a monthly payment that is usually significantly lower than if you continued to pay multiple lenders.

How consolidating saves money

Federal direct student loan consolidation saves you money by providing you with a fixed interest rate and a flexible repayment plan which allows you as long as 15 to 25 years to repay the loan. The major tradeoff is that you end up paying more in interest; however, you benefit from lower monthly payments right out of college and the ability to make larger monthly payments if you want when your finances afford you the opportunity.

Student loan consolidation eligibility

To be eligible for federal direct student loan consolidation you need to have, obviously, more than one federal direct student loan, such as a Stafford loan or PLUS loan. You must also owe at least $10,000 combined and have either graduated from school or no longer be attending. That's it. It's simple and the process is convenient, which means that you have no excuse for not consolidating. Take advantage of consolidation today and be thankful for it tomorrow.