Direct loan consolidating
*NOTE: We previously indicated that loan consolidation would result in removal of the record of default from a borrower’s credit history.That cell of the table has now been corrected to indicate that loan consolidation will not result in removal of the record of default from the borrower’s credit history.You’ll get a new loan term between 10 and 30 years, depending on your balance. A longer term also will result in paying more in interest.But you can always pay off your loan faster if possible, which will save money.Like the federal government, private companies offer the option to consolidate multiple student loans into one.
Those include the option to tie payments to income and get loans forgiven if you work for the government or a nonprofit.
The two main ways to get out of default are loan rehabilitation and loan consolidation.
While loan rehabilitation takes several months to complete, you can quickly apply for loan consolidation.
But it’s only for federal loans, and it won’t cut your interest rate.
Consider federal consolidation if you: Your new fixed interest rate will be the weighted average of your previous rates, rounded up to the nearest one-eighth of 1%.