Government loan consolidation simplifies life

The purpose of government loan consolidation is to take an individual's multiple outstanding loans and combine them into one loan, which simplifies monthly payments, as well as lowers them. There are two programs available for individuals to consolidate their government loans: federal direct loan consolidation and federal loan consolidation.

Federal direct loan consolidation

Federal direct loan consolidation allows you to consolidate your multiple federal loans by taking out one bigger loan directly from the federal government to pay them off. You have to at least have two direct loans to qualify for consolidation. If you're eligible than the benefits of consolidation include being able to lock in a fixed interest rate, a lower monthly payment and the convenience of having to pay only one lender per month instead of two or three.

Federal loan consolidation

Federal loan consolidation, unlike direct, is handled through private lenders. In order to qualify for a consolidated loan you must have at least two federal loans and you must be in good standing with your current lenders. Missed payments or being sent to collections will immediately disqualify you from this option. The benefits of federal loan consolidation are the same as federal direct loan consolidation. The only basis for which program you use depends upon the type of outstanding loans you have.

No reason not to consolidate

Loan Consolidation through the government or private institutions is an option individuals with outstanding student loans should take advantage of. It provides a fixed interest rate and lower monthly payments because the loan extends the repayment period beyond the typical 10 year period that most loans are based on. Since it is virtually impossible to be denied, and the drawbacks are so negligible that they don't even bear mentioning, there is no reason these programs should not be utilized. If you take steps towards consolidating today, the next time your loan payment roles around you'll have extra cash in your pocket, and who doesn't need a little extra cash?