If you are not in repayment status yet, estimate your
monthly non-consolidated loan payment based on the
current interest rate and your loan balance. You can
get payment amounts by calling your lender or loan
servicer.
Next Steps
Determine whether your monthly payment exceeds the
percentage of your income to be allocated to student
loan payment. This percentage should be based on a
realistic budget.
--If payment exceeds monthly allocation,
reevaluate budget
and assess income situation.
Consider deferment or forbearance option for short-
term payment relief needs.
--If debt relief needs are long term, consider
consolidation.
Select loans for consolidation.
Determine monthly payment and total interest costs
for Consolidation Loan and compare to cost of
repaying loans without consolidation.
--For help in calculating monthly payments,
contact your lender or loan servicer.
Consider the impact of consolidation on future
deferment options, cancellation options, and other
borrower benefits such as interest rate discounts or
principal rebates, which can significantly reduce the
cost of repaying your loans. You might lose some
discharge (cancellation) benefits or deferment
benefits if you include certain types of loans in your
Consolidation Loan—Federal Perkins Loans, for
example. To find out more about the impact
consolidating might have on deferment and
cancellation benefits, contact the holder of your loan.
If you decide consolidation is right for you, contact
your lender to begin the consolidation process.
If eligible for in-school consolidation and planning to
consolidate while in school, make sure to apply prior
to leaving school.
If still in the grace period, consider consolidating
approximately two months before the end of the grace
period to allow enough time to have your
Consolidation Loan processed before the grace period
expires, yet not so early that you lose too much of
your grace period if you have a FFEL Consolidation
Loan. (For FFEL Consolidation Loans, if you
consolidate during the grace period, you give up
whatever portion of your grace period remains. You
retain all of your grace period, however, if you have a
Direct Consolidation Loan.) Some FFEL lenders offer
to hold disbursement of Consolidation Loans until the
end of the grace period to enable borrowers to
minimize their interest rate and maximize their grace
period.
Remember that if you consolidate during your grace
period, you can lock in an interest rate at least a half
percent lower than the current repayment rate.
When filling out the consolidation application, provide
complete address information, include two references,
and sign the promissory note.
If already in repayment, make sure to continue making
payments on your loans until consolidation is
completed.
--If you need immediate payment relief, request
deferment or forbearance.
If you have questions about consolidation, do not
hesitate to contact your lender or loan servicer. Check
your loan documents for the toll-free customer
assistance number
