VuNova, Connecting you with right people Answered 10 months ago
Combining all your loans and making it one This helps you managing your loans even better. If you had not consolidated your federal loans, you would have a number of 8-9 lenders, with different amounts of repayment, varying due dates and other numerous problems that you would have to be very careful about. However, if you chose Direct Loan Consolidation, this would combine all your federal loans, make it all one, which means that monthly, instead of making 8-9 payments of debt, now you will only have to make one. This will save you a lot of time and money, which would have been wasted otherwise if you have 8-9 different lenders to pay through different payment methods.
Interest Rate to remain the same With so many lenders on your list of repayment, the rate of interest for each might vary as well. Direct Loan Consolidation can help you come down to one interest rate which will be decided by taking an average of all the loans that are being consolidated. This would be a plus point for you as a debtor making you pay your debt on one interest rate.
You can Lower your repayment amount Consolidation gives you, as a debtor an advantage to get your amount of repayment reduced to an amount that will be easier for you to pay on a monthly basis. Now where your terms said that the life of your loan would be 10 years, you can get this changed to more years which would mean that your repayment amount will decrease. This will give you a chance to manage your repayment of debt easily as a small and single amount needs to be paid every month under direct loan consolidation. This will not only help you by making your loans more affordable, but will also enable you to live your life slightly less stressfully, improving your health conditions simultaneously.
You can change your repayment plan at any time during the direct loan consolidation period Changing your repayment plan is possible only under this consolidation of loans where if you had earlier decided one a standard plan which would be repayment of your loan over a period of 10 years, you can switch your plan to extended which would mean now your amount of repayment would be less and the time period would expand to 20-25 years.