A Direct Consolidation Loan is a low interest loan provided by the United States Department of Education rather than a bank or other type of financial institution. Many people benefit from using Direct Student Loan consolidation programs to combine one or more of their federal student loans into one large loan. Direct Student Loan consolidation programs offer borrowers a way to take advantage of low interest rates, pay their loans off more quickly, and benefit from flexible repayment options.

Understanding Direct Student Loan Consolidation
Direct Student Loan consolidation can greatly reduce the amount of your monthly loan payments. You can take advantage of Direct Student Loan consolidation to stretch your payments over up to 30 years, depending on your total educational debt amount. Longer repayment periods translate into lower monthly payments. By arranging for lower monthly payments you free your money up to pay for other important expenses, such as household, car, and career related expenses.

Keep in mind that Direct Student Loan consolidation often increases the total amount of education debt to be repaid. In spite of lower interest rates, you will pay more in total interest because you are taking a longer repayment period. Carefully weigh the benefits of consolidating against the total cost of a consolidation loan.

In order to be to be eligible for a Direct Student Loan consolidation, you must meet certain, very specific requirements. Loan status and the type of loan are two important factors in determining eligibility. In some, but not all cases, a satisfactory credit rating is required. Most federal student loans are eligible for consolidation under a Direct Student Loan consolidation agreement. Private loans are not eligible for Direct Student Loan consolidation. Also ineligible are loans made by a state that are not guaranteed by the federal government, Primary Care Loans, Law Access Loans, Medical Assist Loans, and Plato Loans.

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