Is A Federal Debt Consolidation Loan Right For You

Is A Federal Debt Consolidation Loan Right For You

by: Bruce

Hughbanks

Copyright © 2005, Bruce Hughbanks, Founder / Director / CEO -

The Employment Alternative Group™

Is A Federal Debt Consolidation Loan Right For You?





The U.S. Government offers a plan that can help you manage your student


loan debt with a Federal Direct Consolidation Loan. Whether you're a


recent graduate, midway into your career, still in school or in your


grace period, a debt consolidation loan from the federal government may


lessen the amount you need to repay, or increase the time that you have


to pay off your current debt.





How can a federal debt consolidation loan help you pay off your debt?





If you have student loans under several different programs, bringing


them all together under one Direct Consolidation Loan can make your debts easier

to manage. By combining all of your loans into one, you're only responsible for

making one payment to one lender - the U.S. Government. To help make the option

of debt consolidation more attractive, there are four flexible payment plans

available, including two that take your income and/or income expectations into

account.





A Direct Consolidation Loan is available to help manage your student


loan debt even if you're still in school or in your grace period. If you choose

to consolidate all your debts into one before you finish school, you can lock in

an interest rate that as much as .6% lower than if you attempt to refinance

later.





For a better idea of how a Federal Direct Consolidation Loan can help


lower your payment and help manage your debt, you can visit the


Department of Education's web site and make use of their online debt calculator

at https://loanconsolidation.ed.gov to estimate your projected monthly payment

under the various plans.





Can a Federal Direct Consolidation Loan help you manage your debt?





There may be reasons why debt consolidation is not the right solution


for you. If you're close to the end of your repayment term, for


instance, it may not be worth the work to consolidate. Extending the life of

your loan is likely to increase the amount you pay overall. If you can afford

the higher monthly payments to pay it off sooner, you can save money in the long

run.





If you're certain that a Federal Direct Consolidation Loan will be to


your benefit, you still need to be eligible for the program. The


eligibility guidelines can be found at

loanconsolidation.ed.gove/borrower/beligible.html In addition, the list of

loans that are eligible for consolidation can be found


here: loanconsolidation.ed.gov.borrower/bloans.html





Which debt consolidation plan is the best one for you?





Standard: The standard repayment plan is fixed-rate that runs for a


maximum of ten years. The minimum payment is $50 monthly.





Extended Repayment Plan: A fixed rate plan with payments extending over


the course of 12-30 years. Payments are a minimum of $50, and the life


of the loan is dependent on the total amount of the debt.





Graduated Repayment Plan: Under the graduated plan, payments start low


and increase, generally every two years. The length of the repayment


period varies from 12 to 30 years.





Income Contingent Repayment Plan: The monthly payment is based on a


borrower's annual adjusted gross income, family size and the total amount of

direct loans.





If your student loan debt is out of control, or if you just want to


manage it more easily, visit loanconsolidation.ed.gov to see how the


federal government can help you with a direct consolidation loan.

About The Author

Bruce

Hughbanks is Dedicated to the Success of Business Minded Entrepreneurs

World Wide. His In-Depth Views, Techniques and Dedication to helping

others is second to none. Contributed to the Advancement of  Internet

Marketing

Success, Copywriting and Joint Venture Affiliations. Find out how he can

help you:

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