Federal Loan Consolidation is possible with any federal education loan. It is even possible to consolidate a single student loan. Consolidation loan can be consolidated only once. If you have already consolidated a loan and are looking to reconsolidate under the direct loan consolidation program, you must add one or more loans that are not consolidated earlier.
It is possible to consolidate two loans that have already been consolidated. It is not possible only to consolidate a single loan again. These rules have been in place since the year 2006.
One of the most important aspects to remember before you consider reconsolidating a loan with direct loan consolidation is that doing this does not relock the rates of interest on a consolidation loan. Within the framework of the weighted average formula to calculate interest rates, the consolidation loan is considered to be a loan with a fixed rate of interest.
These restrictions are a hindrance if you are considering shifting to another lender to reconsolidate your consolidation loans. Usually people opt for the services of direct loan servicing centres towards the end of their grace period of after they start their repayments on loans to consolidate their loans and be associated with the lender they choose for this purpose through their lifetime. One of the strategies that can keep options of shifting lenders open in future is to keep one of your existing student loans excluded from consolidation.
It is important to use the online calculator offered by many loan providers to understand your consolidation loan trade-offs. Loan calculators online help your calculate the increase in total interest you pay on the loan and monthly loan repayment amount reduction as you opt for Direct Loan Consolidation. Calculate your liabilities with caution before you approach the direct loan servicing center for consolidation.
