October 29, 2013
What is Federal Loan Consolidation?
Federal Student Loan Consolidation through the U.S. Department of Education’s Direct Loan Program combines all of your federal student loans into a single loan with a low, fixed interest rate.
Private student loans are not eligible and cannot be consolidated this way. However, borrowers with both private and federal loans can still have their federal loans consolidated.
Why Should I Consolidate My Federal Loans?
The most immediate benefit is, after consolidation you have just one federal student loan, just one lender, and just one loan payment to keep track of each month.
Also, the Direct Loan program offers multiple payment plan options to fit your ability to pay, including extended payment plans and even income-based plans.
What Are My Student Loan Consolidation Options?
• Standard Repayment Plan
You are given a fixed monthly payment based on the size of your loan, with a loan term of ten years to pay it off in full.
• Graduated Repayment Plan
You are given a low monthly payment at first that increases every two years. As with the standard plan, you have ten years to pay your loan off in full.
• Extended Repayment Plan
Extended plans give you 25 years to pay off your loan. You can choose between fixed monthly payments or an Extended Graduated plan. Remember, the longer you take to pay off your loans, the more you will pay in interest.
• Income Contingent Repayment Plan
Your monthly payments are calculated based on your adjusted gross income. If your monthly payment does not cover the monthly interest accrual, the unpaid interest will be capitalized back into the loan. If you have not paid off your loans after 25 years, the remaining balance will be discharged.
• Income-based Repayment Plan
Monthly payments are based on your income, and may be adjusted annually. After 10 years, if you meet certain requirements, you may qualify to have any outstanding balance discharged.
• Pay As You Earn
Your payment amount may increase or decrease each year based on your income and family size. This plan typically has the lowest monthly payment of the income-based plans, and to qualify you must have a partial financial hardship.
• Loan Forgiveness
If you make 120 on-time loan payments under the Income Contingent Repayment (ICR) Plan, the Income-based Repayment (IBR) Plan or the Pay As You Earn Repayment Plan while working at a qualifying, full-time, public service job, you may be eligible to have the remaining outstanding balance on your loan discharged. Qualifying employment is any employment with a federal, state or local government agency, entity or organization, or a not-for-profit organization that has been granted 501(3)(c) tax-exempt status by the IRS. Unlike the ICR, IBR and Pay As You Go Plans for non-public service employees, under the Public Service Loan Forgiveness Plan any remaining loan balance that is discharged is not taxed as income by the IRS.
Can I Apply For A Federal Loan Consolidation On My Own?
Yes, you can. This is a federal program through the U.S. Department of Education. Anyone may learn more about the program and apply online at http://www.loanconsolidation.ed.gov/.
Then Why Should I Use A Service Like Apple Debt Care?
Think of it this way. Everyone has to file a tax return each year. You can file your own tax return, and many people do. There are, however, millions of people who choose to go to an accountant or tax service provider. They are more comfortable going to an expert who knows the tax code inside and out, can guide you through all the proper paper work so it will be filed correctly, and will get them the best refund possible.
That’s what Apple Debt Care can offer you… convenience and peace of mind. Not everyone has the time to spend scouring the government website or holding on the phone with the Department of Education, trying to find out what forms they need to fill out. Our debt consolidation experts guide you through the consolidation process. We don’t submit your application until we have ensured that each and every form is included, and is filled out completely and correctly. And we back our experts with a performance-based money back guarantee. If we don’t secure your consolidation, we don’t get paid.
Apple Debt Care also works to find the best repayment plan for you, based on your immediate and long-term financial needs. We’ll find out if you qualify for income-based reductions in your monthly payment, or help you determine whether a slightly higher monthly payment that still fits within your budget will ultimately save you money over the life of the loan.