Student Loan Consolidation
Frequently Asked Questions (FAQ)
Here are the most commonly-asked questions about student loan consolidation.
If you still have questions that are not answered by this student loan consolidation FAQ, please don't hesitate to email or call Student Benefit Services toll-free at 1-866-652-2121 for a free consultation, especially before you consolidate or even reconsolidate with anyone else! We're here to help you get the best that student loan consolidation offers, including the best rates and the best service.
- What is a Federal Consolidation Loan?
- Student loan consolidation sounds too good to be true. Is this another debt consolidation scam?
- How do I know if I'm eligible to consolidate through Student Benefit Services?
- What's the minimum balance to consolidate through Student Benefit Services?
- What loans can I consolidate?
- I have several student loans, but I also have bad credit. Can I still consolidate my student loans?
- What if I have already consolidated my student loans. Can I reconsolidate in to lock in the lower rate?
- How do I get the lowest student loan payments available today?
- What will my new interest rate be?
- Is there a fee to consolidate?
- Is there a credit check?
- How long will it take for me to repay my loans if I consolidate?
- What are my repayment options?
- Do I have to extend my terms when I consolidate?
- Can I switch repayment options later on?
- Are deferments and forbearance allowed under a consolidation loan?
- What are the benefits of applying during my grace period?
- Do I get a grace period on my consolidation loan?
- What about my subsidy?
- Can I consolidate my loans with my spouse? Are spousal or joint spouse consolidation loans a good idea?
- How do I apply?
- How long will it take for you to get my loans consolidated?
- What do I do while my loans are being consolidated?
- Who do I pay?
- Can I pay my consolidation loan electronically?
- Can I prepay my consolidation loan?
- I attended graduate school, am I still eligible?
- I have borrowed PLUS loans for my child's education. Can I consolidate them?
- I'm still in school. Do I have to wait until I graduate before I can consolidate my student loans?
- I need student loans to go to school, yet I have bad credit and I lack a qualified cosigner. What can I do to get my student loans?
What is a Federal Consolidation Loan?
A Federal Consolidation Loan is a loan that repays some or all of your outstanding eligible federal student loans, and replaces the multiple payments you may be making each month with a single student loan payment. In most cases, your repayment term is extended to make your monthly payments more affordable, however, you may always prepay your loan with no penalties. The interest rate on the consolidation will be a fixed rate for the entire term equal to the weighted average interest rates of your consolidated student loans rounded up to the nearest 1/8% not to exceed 8.25%.
Student loan consolidation sounds too good to be true. Is this another debt consolidation scam?
Absolutely not! The Federal government created the student loan consolidation program to help students and their parents afford higher education, so that our youth is better educated and can achieve higher earning power. Like many government programs, however, some of the rules and procedures may be a bit complicated. That's why you're encouraged to let OneSimpleLoan be your student loan consolidation provider of choice!
How do I know if I'm eligible to consolidate my student loans through Student Benefit Services?
You are eligible if ALL the following are true:
You have graduated, left school, or are currently attending school less than half time, and your loans are in repayment, deferment/forbearance or in grace.
You have at least $10,000 in eligible student loans you wish to consolidate.
You can certify that you do not have a Federal Consolidation Loan application pending with another lender.
What's the minimum balance to consolidate though Student Benefit Services?
You must have an outstanding balance of $10,000 in eligible student loans to consolidate them under this program.
- Federal and Federal Direct Stafford (subsidized and unsubsidized)
- Federal and Federal Direct PLUS
- SLS (Supplementary Loans for Students)
- Federal Perkins
- Federal Nursing Student Loans (NSL)
- Federal Health Education Assistance Loan (HEAL)
- Federal Health Professional Student Loans (HPSL)
- Health Professions Student Loans (HPSL)
- Loans for Disadvantaged Students (LDS)
- Federal Insured Students Loans (FISL)
- Federal Consolidation Loans
- Federal Direct Consolidation Loans
A note about defaulted loans: You may consolidate defaulted loans as long as you make three consecutive monthly payments to your guarantor prior to applying for loan consolidation.
I have several student loans, but I also have bad credit. Can I still consolidate my student loans?
Bad credit, poor credit? No problem! There are no credit checks and no co-signers required for student loan consolidation. We work solely with the student loans you own, and nothing else.
What if I have already consolidated my student loans. Can I reconsolidate to lock in the lower rate?
If you have already consolidated your William D. Ford Direct Loan, the Department of Education has ruled that you cannot reconsolidate. OneSimpleLoan has filed a lawsuit requesting a temporary injunction against the DOE's ruling, to enable more borrowers to reconsolidate. No judgement has yet been issued.
You can also re-consolidate if you either received a new eligible loan since the consolidation or have left an eligible loan out of the original consolidation. An existing consolidation loan with no other eligible debt may be able to be refinanced or reconsolidated through our repayment discount program. If you have any questions about your reconsolidation eligibility, please call our Student Loan Consultants toll-free at (866)-652-2121.
How do I get the lowest student loan payments available today?
Make your required number of scheduled payments (within the first 15 days of the due date each month) on your new consolidation loan, and we'll automatically reduce your interest rate by one full percentage point and leave it there as long as you continue to make on-time payments. Pay electronically (direct debit payments from your checking or savings account) and you can reduce your interest rate by an additional .25 of a percentage point, as long as you continue to make your payments electronically. When you qualify for both benefits, you can reduce your interest rate by 1.25% and save hundreds, even thousands of dollars on your total loan costs.
What will my new interest rate be?
Your new interest rate will be fixed, and is calculated by taking the weighted average of the rates on the loans you wish to consolidate, and rounding up to the nearest 1/8%. In no case can your new interest rate exceed 8.25%. For example, if you have only Stafford loans disbursed since 7/1/05, your new fixed interest rate would be between 4.70% (in grace) and 5.30% (in repayment). To qualify for a lower rate, sign up for direct debit (.25% off) and make your payments on your consolidation loan on time (1% off).
Is there a fee to consolidate?
No. Lenders pay the fees, you don't.
No credit checks are required to consolidate your loans.
How long will it take for me to repay my loans if I consolidate?
Depending on the outstanding balance on your federal student loans (even those you may wish to leave out of the consolidation), you may have up to 30 years to repay your student loans:
Outstanding balance Maximum term
- $10,000 - $19,999 15 years
- $20,000 - $39,999 20 years
- $30,000 - $39,999 25 years
- $40,000 - $59,999 25 years
- $60,000 or more 30 years
Important note about your repayment term: You may choose a repayment term that is shorter than the ones noted above. Just call one of our Student Loan Consultants toll-free at (866)-652-2121. Also, you may always prepay your loan with no penalties to reduce your total loan cost.
What are my repayment options?
You may choose from the following repayment options:
- Level Repayment Plan - your least expensive option. Payments are fixed over the life of the loan and repay all principal and interest due each month.
- Graduated Repayment - can reduce your payments by more than 50% because you make small, interest-only payments at the beginning of repayment, and larger payments later on, when you may be in a better position to afford them. You may choose from the following graduated repayment plans:
- 2 Year Graduated Repayment Plan - Interest-only payments for the first two years, followed by level payments for the remainder of the term.
- Extended Repayment - Extends repayment up to 25 years, if you have balance between $30,000 and $39,000 in eligible student loans.
- 2 Year Graduated Repayment Plan - Interest-only payments for the first two years, followed by level payments for the remainder of the term.
Do I have to extend my terms when I consolidate?
Absolutely not! You can keep your payments and the terms the same. Also, you can customize it as low as 5 years (60 months). Keep in mind, there is no prepayment penalty.
Can I switch my repayment option later on?
Yes.
Are deferments and forbearance allowed under a consolidation loan?
Yes, please refer to the Federal Consolidation Loan Deferment and Forbearance Benefits page for a complete description of deferment and forbearance eligibility rules.
What are the benefits of applying during a grace or deferment period?
When you apply for loan consolidation during a grace or deferment period (authorized time periods when payments are not due), you are eligible for a further reduction of your consolidation loan interest rate. That's because during these periods, your variable Stafford loan interest rate is .6% lower than during active repayment. If you wish to take advantage of this opportunity, check the appropriate box on your student loan consolidation application.
Do I get a grace period on my consolidation loan?
No, once you have been notified that your consolidation loan has been disbursed, you will begin repayment within 30 days.
What about the subsidy on the Stafford loans I'm consolidating?
Borrowers who are eligible for interest subsidies on their underlying Stafford loans will continue to receive subsidy benefits on the portion of the consolidation loan that repays the original subsidized Stafford loans.
Can I consolidate with my spouse's loans? Are spousal or joint spouse consolidation loans a good idea?
No, the law recently changed abolishing spousal consolidation. However you may consolidate each partner's loans separately.
It's easy! Just click on Apply Now to download, complete and mail us an application. You may also call us toll-free at 1-866-652-2121, and we will guide you through the application over the phone. Whichever method you choose, you can complete the application in about 15 minutes, as long as you have gathered the paperwork you have about the loans you wish to consolidate beforehand.
How long will it take for you to get my loans consolidated?
It takes 2-4 months for us to receive payoff information from your lenders, review your application for completeness and disburse your new consolidation loan.
What do I do while my loans are being consolidated?
Continue to make regular monthly payments on your student loans! If they become delinquent or go into default, your consolidation loan will be delayed.
Once your loans are consolidated, you will receive a payment book containing all the information you will need about your new loan servicing center.
Can I pay my consolidation loan electronically?
You may choose to have your monthly consolidation loan payments debited electronically from your checking or savings account. When you do, we'll reduce your consolidation interest rate by an additional .25%. To sign up for electronic payment, please refer to the disclosure statement you will receive when your consolidation loan is disbursed.
Can I prepay my consolidation loan?
Yes, you may always prepay (pay ahead) your consolidation loan, without penalty.
I attended graduate school, am I still eligible?
Yes, as long as you have eligible loans you wish to consolidate. Most people who have attended graduate school have borrowed more for their education, and so have more to save by consolidating. Loan consolidation can help you lock in a very low interest rate, cut your payments by more than half and let you make a single payment for all your eligible student loans.
I have borrowed PLUS loans for my child's education. Can I consolidate them?
Yes, you should take this opportunity to lock in a great rate on your PLUS loans, even if your child has not completed school. If you are borrowing for the current academic year (or have borrowed since July 1, 1998) your variable PLUS interest rate is 8.5% with a cap of 9%. Consolidation will let you lock in a weighted rate of 8.25% on your PLUS loans for life. If you need to borrow PLUS funds again, you will be eligible to reconsolidate your consolidation loan with your new PLUS loans.
I'm still in school. Do I need to wait until I graduate before I can consolidate my student loans?
Not necessarily! If you are in graduate school, you can consolidate your undergraduate school loans. If you're in a post-graduate program, such as medical school or law school, you can consolidate your undergraduate and graduate school loans! If you have already consolidated your undergraduate loans, and are about to leave graduate school, you may be eligible to consolidate both undergraduate and graduate loans into one payment!
I need student loans to go to school, yet I have bad credit and I lack a qualified cosigner. What can I do to get my student loans?
If you're looking for additional student loans to fund your education, whether it's a Stafford, PLUS or private student loan, don't worry! Student Benefit Services is here to help you. We have created an alliance with InCharge.org, a highly-reputable non-profit credit counseling company, to help individuals improve their credit rating and better manage their debt, even including credit card debt. There's absolutely no charge to speak with a credit counselor! Just call toll-free 1-866-652-2121 (lines are open 7 days a week), or click here to visit their debt counseling site. If you have bad credit and need student loans, call now. There's nothing to lose except your debt!
Not sure if you qualify for student loan consolidation? Need additional student loans? Contact us by email or by phone toll-free at 1-866-652-2121 and we'll be happy to help you with both financial aid services!
How to Get the Pre-July 1st Interest Rate After the Deadline!
According to the U.S. Department of Education, if you have "substantially completed" a student loan consolidation application prior to July 1, 2006, you may still qualify for the lower pre-July 1 interest rate, even at this late date!
CURRENT STUDENT LOAN CONSOLIDATION
INTEREST RATES
5.375% - 6.125%*
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