How long to consolidate federal loans

More importantly, the amount of interest you pay over the lifetime of the loan will be about the same. 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.

There are no fees to consolidate. Under no circumstances pay a fee in advance to get a federal education loan or consolidate your federal education loans. There are no fees to consolidate your loans. While other federal education loans, such as the Stafford and PLUS loans, may charge some fees, the fees are always deducted from the disbursement check.

There is never an upfront fee. If someone wants you to pay an upfront fee, chances are that it is an example of an advance fee loan scam. 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. The private lender you choose for refinancing typically conducts a credit check to determine your rate.

So, be sure to provide your most recent documents to access better rates. Expect up to 75 business days before you see your consolidated student loan payout. Consolidating student loans, whether they are federal or private, requires application and processing time. You can apply for a Direct Consolidation Loan for your federal student loans online , which may take around 30 minutes to complete. Once you apply, your servicer may take between 30 and 75 days to complete the consolidation process, assuming you face no delays in the system.

Meanwhile, private student loan refinancing usually takes five days for application and an additional two or three weeks for processing. Each private lender has a unique system, so you might want to review your options before settling with one servicer. To get the information needed to pay off the old loans, the U.

The regulations require the old lenders to complete and return the LVCs within 10 business days, but sometimes it takes longer. If the old loans are all Direct Loans, it can take less time, as the U. After the U. Department of Education receives the LVCs, approval of the application for a consolidation loan and paying off the old loans can take an additional two weeks. However, there will be a delay between your application, loan approval and when your original federal loans are paid off.

Your repayment amount and schedule are based on the repayment plan selected during the application process. The loan servicer will contact you with your payment schedule—and the date of your first payment—but borrowers generally have up to 60 days after loan disbursement to begin repayment. However, if you want a lower interest rate—or want to consolidate private student loans—consider refinancing. Kiah Treece is a licensed attorney and small business owner with experience in real estate and financing.

Her focus is on demystifying debt to help individuals and business owners take control of their finances. She has won several national and state awards for uncovering employee discrimination at a government agency, and how the financial crisis impacted Florida banking and immigration. Select Region. United States. United Kingdom. Kiah Treece, Rachel Witkowski.

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