Federal Loan Consolidation

The first step in applying for federal loan consolidation is contacting your current lenders. If you only have one lender, you will need to apply for a consolidation loan with that lender. However, if you have more than one lender, you may choose which lender you would like to consolidate with. If your current lenders do not participate in loan consolidation, you may apply with any participating lender.

Applying For Federal Loan Consolidation

The lender you choose will provide you with an application kit that will include a Federal Consolidation Loan application and promissory note. The application packet will also include the Additional Loan Listing and instructions for filling out the application. It is imperative to read through all parts of the application and instructions. If you do not understand any part of the application or have any questions at all, you should contact the lender before signing the application. After completing the necessary paperwork, you will need to mail the application to the lender and keep a copy for your personal records. As an alternative to applying by mail, consider applying online for faster service.

From the time you have mailed your completed application the application process will generally take 30 to 90 days to be completed. The consolidating lender, upon approval of your application, will pay off your existing federal loans and send a packet to you containing a disclosure statement and a new repayment schedule. This packet should also contain other vital loan information, such as your new interest rate, total debt, and terms of your consolidation loan.

To avoid going into default on your existing loans, you must continue to make timely payments on each of your current student loans until your consolidation loan is in repayment status. Payments on your consolidation loan will typically begin within a 60-day period of the time your loan consolidator repays your individual loans. Carefully review your new payment schedule and make sure you understand exactly when and how your payments should be made.