Consolidating government school loans

Meanwhile, graduated repayment is tailored for the borrower who will require lower payments for the first few years and can make higher payments afterward.

If you choose a graduated repayment plan, you should be aware that time you take off from paying on the principal of the loan will likely increase the total amount of your loan.

However, some borrowers can qualify for the government's Extended Repayment Plan.

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The standard plan involves fixed monthly payments for up to 10 years.

The extended plan allows borrowers to extend the length of a loan up to 30 years, but each lender's repayment terms will vary, often depending upon the balances of your loans.

A PLUS loan made to the parent of a dependent student cannot be transferred to the student through consolidation.

Therefore, a student who is applying for loan consolidation cannot include the PLUS loan the parent took out for the dependent student’s education.

To qualify, the borrower must have one or more appropriate Federal Student Loans with a combined balance greater than $10,000.

The borrower also must have left school, graduated or must be attending school less than half the time.

Maximum Loan Amount: None Interest Rate: Weighted average interest rate on the loans being consolidated, rounded to the nearest one-eighth of 1 percent, not to exceed 8.25 percent.

Currently, the interest rate is fixed for the life of the loan.

Interest rates are fixed for the life of the student loan.

Rates are based on the weighted average of the interest rates of the loans being consolidated, rounded up to the nearest one-eighth-percent or 8.25 percent, whichever is less.

Private loan consolidation may require a minimum loan balance, but private lenders tend to be more flexible than federal loan programs.

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