How Many Times Can I Consolidate??? | 02.07.07
I received a question regarding re-consolidation from one of my readers (Thanks Heather!). The question was as follows – Once federal loans are consolidated at a set rate can they later be consolidated again with the same company or with a different company offering a lower interest rate?
For the most part, you can not re-consolidate your student loans with the same lender or a different lender – Federal guidelines. However, there are a few circumstances that will allow borrowers to add a previous consolidation to a new consolidation:
- If you take out new federal loans after your consolidation is complete, once you are no longer enrolled more than half time, you can consolidate the older consolidation and new federal loans with which ever lender you choose.
- When your original consolidation was processed, if any loans were not included with the original consolidation, you can combine the missing loan with the new consolidation with which ever lender you choose. However, this normally doesn’t occur that frequently – most consolidations will capture all outstanding student loans.
As for the lower interest rate, under FFELP (Federal Family Education Loan Program) guidelines, all consolidation lenders must offer the same federal interest rate – no less no more. What you’ll see different with each lender are their borrower benefits packages. These are discounts that are applied to the consolidation loan for certain actions such as automatic checking account withdrawal, and timely payments. Some lenders advertise what the interest rate would be AFTER discounts are applied – So be careful because not all borrowers qualify for every discount.
For all those interested in re-consolidation, keep your eyes pealed and stay tuned in the months to come. There have been rumors of legislative changes that could re-instate the ability to re-consolidate. Or if you have questions about your student loans and whether or not you qualify for consolidation, give us a call toll-free at (877) 328-1565.
Thanks for the question Heather – and take care!
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