Direct Student Loan Consolidation

Written by Mark Sanfilippo
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The simple truth of direct student loan consolidation is that there has never been a better time to consolidate your student loans. This is not an opinion. It's a fact. There has never been a better time to consolidate because federally mandated interest rates are at the lowest they've been in 37 years.

Favorable interest rates are really the secret to consolidation. There's really no magic to the process. If interest rates are currently lower than the interest rates you have on your various loans, then it is probably in your favor to consolidate your loans. It's that simple. Say you have a series of four loans. Two of these loans are at 10 percent and the other two are at eight percent. If you can consolidate all of the loans to one loan of even as high as eight percent, you're saving yourself money in the long run.

One of the great things about Direct Student Loan consolidation is that it does not require a credit check or any kind of application fee. This is a government program and it's your right and privilege to take advantage of it. For some consolidation can lower their monthly payments by up to 50 percent or more.

Some Lenders Even Offer Additional Interest Rate Reduction

Despite the fact that Direct Loan consolidation is a Federal program, there are various lenders that serve as go-betweens and can offer additional interest rate reductions. Some lenders for example, will give you an extra one percent rate reduction if you consolidate during your grace period. Most lenders will also offer you a rate reduction if you have your payments automatically deducted from your bank account.

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