Consolidating stafford and perkins loans

What you owe: Borrowers need to understand more than just their loan balance.They also need to know what type of loans they have.Consolidating a Perkins loan with another loan could eliminate that option.Perkins, Stafford and Grad Plus loans offer income-based repayment options. Combining a Parent Direct PLUS loan with another type of loan can eliminate some of those flexible repayment options, says Loonin with the National Consumer Law Center."If you combine your Parent PLUS loan with your other loans, it taints the entire loan," she says.Loan consolidation can also be a lifeline for borrowers in default, says Loonin, with the National Consumer Law Center. Graduates with delinquent loans may be told they need to bring their loans current in order to consolidate, but that isn't always the case, she adds."If it's that far gone, it's often a good strategy to get out of default," she says, but warns there is a lot of misinformation about prerequisites for the process. Interest rates on these varied over the years, so check with your loan servicer - the one who sends the statements each month - to find out the rate on each loan and whether it is fixed.

Before you consolidate, consider the following pros and cons: Note: Just remember, you must continue making payments after submitting your application until you receive notice from your servicer that underlying loans have been paid off.Students may not have to make payments first, she says, as long as they choose an income-based repayment plan. Federal student loan borrowers have the option of consolidating their loans via the Direct Consolidation Loan program offered by the U. That loan is then serviced by the servicer of your choosing – of which Nelnet is one!You have the option to select the servicer of your choice (of which, Nelnet is an option) After your new Direct Consolidation Loan is complete, you may still add more eligible loans to your existing consolidation.If you would like to add other eligible loans, your servicer must receive your Request to Add Loans Form within 180 days from the date your Direct Consolidation Loan is completed (originated).