Consolidation loans are available for most federal loans. When you consolidate your federal student loans, you are taking a new loan called a Direct Consolidation Loan. This new loan combines several federal student or parent loans into one larger loan, which replaces your original federal student loans. You usually won’t get a lower interest rate, but you will benefit from a single monthly payment.
Consolidating will give you access to several alternate repayment plans which include extended repayment, graduated repayment and IBR (Income-Based Repayment).
Complete the application on StudentAid.gov. You’ll need to finish the application in one session. Set aside about 30 minutes. Before starting, gather the documents listed in the “What do I need?” section before you start.
- Choose which loans you want to consolidate.
- Select a repayment plan.
- Pick a loan servicer.
Read everything before submitting the form online.
Learn more: Ultimate Guide to Student Loan Consolidation