So, the interest rate on a consolidation loan may be higher than the underlying loans.However, the interest rate is fixed for the life of the loan.Learn more about Direct Consolidation Loans on the Federal Student Aid site Apply now at Student Private student loans are NOT eligible for consolidation into a Direct Consolidation Loan.You may also add eligible loans to your existing Direct Consolidation Loan using the form below – if you are within 180 days of the date we paid off the first loans you are consolidating.In the process of consolidation, each original loan is paid in full and a new Direct Consolidation Loan is originated for the combined balance of the consolidated loans.ED determines the interest rate of the Direct Consolidation Loan by taking the weighted average of the interest rates on your existing loans and rounding up to the nearest 1/8 of a percent (0.125).No origination fees in most states, no prepayment penalties.
But before you dismiss the idea of refinancing, you should first take a look to see if any of these benefits apply to you.
One way to resolve a defaulted loan is to combine your existing federal student loans into a new Direct Consolidation Loan from the US Department of Education (ED).
Even if you have only one defaulted student loan, you may obtain a Direct Consolidation Loan to resolve the default.
Federal student loans also provide certain benefits that may be unavailable with private student loans.
The Federal Direct Consolidation Loan Program (FDCLP) offered by the federal government allows borrowers to combine any of their outstanding federal student loans into a single new loan.