School loan consolidation provides you an opportunity to merge all your loans and pay only once for all of them. There are a number of options catering to almost everyone’s needs. These options are divided into the following two major categories:
- Federal loan consolidation
- Private loan consolidation
This type of school loan consolidation provides financial help to those who are enrolled at schools that participate in federal aid programs. By school we mean a two-year or four-year degree awarding public or private college, university or trade school.
Consolidation can help reduce your student loan debt by fixing and reducing the interest rate on your loans. This loan option will also combine your separate loan debts into one package thus managing your debt paying options.
Eligibility for federal loan:
In order to qualify for federal consolidation, one should check out the following things before applying for it.
- The candidate should no longer be enrolled in school (defined as being enrolled less than half-time)
- You must be in the ‘grace period’ of the loan or must be actively repaying your loan.
- Most consolidation companies require a minimum loan amount i.e. $10,000 is typical.