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Direct Loan Consolidation is opted for by many due to the various advantages it offers such as consolidating one or more loans into a single monthly repayment, enjoying renewed deferment and benefiting from a possible reduction in monthly repayment amount. As compared to Private Loan Consolidation, Federal loan consolidation programs work out better and more convenient for borrowers.
If you are currently running a Perkins Loan, it is possible to convert that to a direct consolidation loan provided you include at least one Federal Family Education Loan (FFEL) or direct loan in your request. It is not possible to include the Perkins Loan straight away into a direct consolidation loan. Direct loan program will consolidate the Perkins Loan under direct loan consolidation program’s unsubsidized portion.
As a borrower, be sure to analyze pros and cons of including Perkins Loan in the direct consolidation loan.
When Perkins Loan is included in the consolidation program, it is no more eligible for cancellation benefits. Perkins Loan placed in deferment does not accrue interest. Interest rates accumulated during the deferment period is the responsibility of the borrower when this loan comes under the direct loan consolidation.
Six to nine month grace period is offered to Perkins Loan borrowers. Any remaining grace period is lost when you opt for direct consolidation. Though the repayment period for Perkins Loans is usually ten years and not very flexible, this loan program offers lower interest rates.
Keeping these disadvantages in mind you can decide on whether you want to opt for including Perkins Loan for consolidation. direct loan servicing centre will provide you with information on various low monthly repayment programs offered by the direct consolidation loan program including graduated, standard, income contingent and extended repayment plans. Analyze and study various options before you choose the loans you want to consolidate.
