Consolidating direct federal student loans
With this option however, you consolidate and pay off debt to immediately fix the default status on your debt.
One thing that’s critical to note – if you use a Direct Consolidation Loan to bring defaulted debt current, !
If you just want a quick and easy snapshot, you can visit our Solutions page for Federal Debt Consolidation Loans.
You can also call [PHONE_NUMBER] to speak with a student loan consolidation specialist confidentially at no charge.
By federal law, credit damage caused by missed payments on student loans are one of the few negative items that can be removed from your credit report completely in less than a year.
If you make 9 consecutive payments on a defaulted student loan it becomes current and all previous missed payments are removed from your credit report.
Consolidation reduces that down to just one bill, so debt is easier to manage.By consolidating your education loan(s), your interest rate will be fixed and determined by the weighted average of the interest rates on the loan(s) being consolidated, rounded to the nearest higher one-eighth of one percent.You may determine your interest rate by using the Repayment Estimator on the click on the Repayment & Consolidation tab.There are no fees, no credit checks, and no pre-payment penalities on a federal student consolidation loan.The interest rate for a federal consolidation loan will be a fixed rate, which is determined by the weighted average of the interest rates on the loan(s) being consolidated, rounded to the nearest higher one-eighth of one percent.In other words, if you have federal student loan debt, you can apply for a new loan through William D.Ford Direct Loan Program to consolidate your existing loans.The funds you receive are disbursed to pay off your original federal student loans, leaving only the consolidation loan to pay off.Consolidating debt is generally done to simplify debt repayment.Student borrowers may be able to reduce their federal consolidation loan interest rate by an extra 0.25 percent by electing to make their monthly payments through an automatic electronic debit from a bank account.This means that you authorize the payments to be made from your checking or savings account.