Federal Student Debt Consolidation Benefits

Federal Student Debt Consolidation Benefits Are At Hand by Amanda Hash

Federal student loans are subsidized loans that provide financing for college studies. These loans tend to be quite inexpensive but the amounts can be high and thus when the payments are due, sometimes turn out to be unaffordable for those going through financial problems. Fortunately, it is possible to consolidate federal student debt. But, what are the benefits of federal student debt consolidation?

Save Thousands By Locking The Rate

Through Federal Student Debt Consolidation you can lock the interest rate you pay for the money owed and thus avoid increases that often occur when your interest rate is variable. Not only you save thousands of dollars over the whole life of the loan but you will also obtain reductions on the amount of your monthly payments and you will notice it right away as your installments become more affordable.

You can lock the rate as low as 6.5% or even less under the right circumstances and this will imply monthly savings of hundreds and overall savings of several thousands over the whole repayment schedule.

Eliminate Prepayment Penalties

By consolidating your federal student debt into a single federal loan with a locked rate, you will eliminate all prepayment penalties that the old debt may have had. And thus, you will be able to repay your loan at the speed you want. If you want to hasten the pace in order to become debt free sooner you can do so without fearing being overcharged for prepaying your federal student consolidation loan.

Tax Deductions

The interests on your federal student debt consolidation loan are tax deductible and thus you can save a lot of money on taxes. Having a single loan instead of several will simplify the deduction process and make things a lot easier for you when it comes to preparing your tax presentations.

Your Deferment Options Are Renewed

When you consolidate your student debt through a federal student debt consolidation loan you will be able to use deferment and forbearance options again. Thus, if for some reason you can not afford the monthly payments on your student debt when the payments are due, you can request these exemptions to postpone payment till your financial situation improves and you are able to resume the repayment of your federal student consolidation loan.

Obtain A Longer Repayment Program

By Consolidating your federal student debt you will be able to get a longer repayment program. With federal student consolidation you can obtain a repayment schedule of up to 25 years thus reducing your monthly payments and making it easier to afford the loan cancellation. But if you want to become debt free sooner you can reduce the term of the loan to shorter periods (15 years, 10 years, etc.) at your convenience.

As you can see, federal student debt consolidation provides many benefits for students and graduate students that should be considered. Even if you have no problems with your current debt repayment, you can always analyze the possibility of consolidating your student debt and saving money at the same time.


Amanda Hash is an expert financial consultant who specializes in Bad Credit Debt Consolidation and Bad Credit Bankruptcy Loans. By visiting http://www.yourloanservices.com/ you'll learn how to get approved and recover your credit.

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