Overview of Consolidation:

Individuals can break down the intensity of loan repayments with a technique called consolidation, as opposed to paying up in one lump sum.  This process is executed by combining a slew of Federal Education loans into one loan, while making monthly payments at a certain rate.  In some cases, this monthly payment may consist of a lower price than what the individual is paying as we speak. 

Loan Consolidation at a Glance:

A loan consolidation takes place when several federal student loans are bought by a lender and meshed into one new loan, thus in a single, lower fixed-rate monthly payment for the borrower. The borrower signs a new application and promissory note. The initial loans paid back and a new single loan is in effect.

Some loans to keep in mind along with their affiliates:

The first and most common type of consolidation loan is the Direct Consolidation Loan.

  The Direct Consolidation Loan has three subcategories:

* If an individual possesses more than one loan from the above breakdown, they still only have one Direct Consolidation Loan and will only take on one monthly payment.

Also, there exists the Federal Consolidation Loan available from FFEL lenders.  Whether it is from a Direct Consolidation Loan or from a Federal Loan, the loan possessor will pay off all existing loans and will make one consolidation loan to restore them. If an individual possesses subsidized or unsubsidized loans, they will be categorized in a suitable fashion, when consolidation takes place.  This way, an individual will not lose their interest subsidy on the subsidized loans.

Through the FFEL Program, you can qualify for a Subsidized or unsubsidized FFEL Consolidation Loan, varying on the loans of consolidation. 

An individual also has the right to consolidate the Federal Perkins Loans and other education-related loans such as the Federal Stafford Loan.