Student Loan Consolidation

President Obama Student Loan Forgiveness Program

Obama loan forgiveness is a plan that has been introduced by President Obama due to the increasing problems about students’ loan debts in United States. This plan is intended to help students who are not able to fully pay their loan and those who have settled a significant amount of their loan balance for numerous years. This plan clears all outstanding debts of students who have made timely and regular payments on their current federal loans for more than 20 years. Also, individuals who work in government departments like the military service might have their entire amount overdue cleared earlier before the minimum year based this plan.

Do I Qualify?

It’s significant to note that not every borrower may quality for this program. This plan is only eligible to people who currently have federal loans like Perkins or Stafford loan. Only those who people who had borrowed a loan on or later than October 1, 2007, or new borrowers with a current federal direct loan may qualify. In addition, you should have acquired your direct loan later than October 1, 2011. Therefore, it’s important to know the actual date when you acquired your loan so as to establish your eligibility. Moreover, people with default student loans are not eligible for this program. If you don’t qualify, we can assist you with other options like loan consolidation.

Why Wait? Consolidate!

The United States currently has over 1 trillion dollars in student loan debt. American graduates find that before their “life after college” can begin, they are overwhelmed with debt for no other reason than wanting a good education. Many have monthly payments they struggle to afford.

We at Credit Firm Inc want to help ease that burden. That is why we have dedicated ourselves to help our graduates find the most affordable payment solutions that the Department of Education has to offer. Speak to one our Student Loan Analysts and find out what type of payment options are available to lighten your load.

No Cost to Consolidate
Aside from a slight increase in the interest rate on the consolidation loan, there is no cost to consolidate your loans. You read that right, there are no fees to consolidate.

Who Can Consolidate?
Both student and parent borrowers can consolidate their education loans. Students and parents cannot combine their loans through consolidation, since only loans from the same borrower can be consolidated. But they can consolidate their loans separately.

Students can consolidate their education loans only during the grace period or after the loans enter repayment. Loans that are in default but with satisfactory repayment arrangements may also be consolidated. Students can no longer consolidate while they are still in school. Parents, however, can consolidate PLUS loans at any time.

Which Loans Can be Consolidated?
Any federal education loan can be consolidated. You can even consolidate a single loan. There are, however, a few restrictions on consolidating a consolidation loan.

You can consolidate a consolidation loan only once. In order to reconsolidate an existing consolidation loan, you must add loans that were not previously consolidated to the consolidation loan. You can also consolidate two consolidation loans together. But you cannot consolidate a single consolidation loan by itself.

Note that when you reconsolidate a consolidation loan, it does not re-lock the rates on the consolidation loan. The consolidation loan is treated as a fixed rate loan within the weighted average interest rate formula used to calculate the interest rate on the new consolidation loan.

Repayment Plans
Consolidation loans provide access to several alternate repayment plans besides standard ten-year repayment. These include extended repayment, graduated repayment, income contingent repayment (Direct Loans only) and income sensitive repayment (FFEL only). If you do not specify the repayment terms, you will receive standard ten-year repayment.

Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid over the lifetime of the loan is increased.

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