× Home

Top Authors Top Articles Why Submit Articles? FAQ

Login Register Forgot password?

Government Debt Consolidation Loans

By:   |   Jul 08, 2018   |   Views: 10   |   Comments: 0

Government debt consolidation loans are loans offered through various government programs to pay off multiple loans. This enables an individual to take care of one single monthly payment compared to 3 or 4 payments to different creditors. This is the principle of debt consolidation. Debt consolidation also helps by lowering the interest rate by switching from unsecured debt to secured debt.

The federal government has various programs that help particularly students in debt to consolidate their loans to quickly reduce and eliminate their debt. Students typically have student loans, credit card debt, and medical bills that keep them in a state of high debt. The Department of Education pays off the original federal education loans and issues a new loan for the consolidated amount of the old loans. This is done as part of the Direct Consolidation Loan Program.

The Federal Family Education Loan (FFEL) Programs and the Direct Loan Program are programs that fall under the Higher Education Act (HEA) and allow loan consolidation. This works by issuing a new consolidation loan to the borrower that pays off the borrower's existing loans. The borrower might have contracted the existing loans from various lending agencies, which have different terms, repayment dates and arrangements. Paying off these multiple loans with one loan and making a single monthly payment helps individuals effect timely payments at a lower interest rate. With a consolidated loan, the monthly payment amount is generally lower. Moreover, there is increased clarity as to the total term of payback, the exact interest rate charged, and the payment due date. In most cases the payback term can be increased to ease the payoff process and reduce the monthly commitments.

The government debt consolidation loan program has four plans for the borrower - standard plan, extended payment plan, graduated payment plan, and income contingent repayment (ICR) plan. Each of these plans has features that suit the situation of a borrower, thus providing the flexibility required of a debt consolidation and elimination program.

To learn more about debt relief, the federal debt relief program, and how to get started, please visit: DebtRelief.bz

Was this helpful?
Thank you!

More from Sara Ross

The Best Remedy for Wrinkles and Dark Spots

As we age, wrinkles and dark spots often begin to make an appearance on the face...

By: Sara Rossl Uncategorizedl Jul 08, 2018 lViews: 51 lComments: 0

The Best Moisturizer Oil For Your Skin

The best moisturizer oil grows naturally in the ground; it is not something that...

By: Sara Rossl Uncategorizedl Jul 08, 2018 lViews: 49 lComments: 0

The Best Eye Cream for Dry Scaley Skin Can Also Reduce Wrinkles & Dark Circles Naturally

You might disagree, but to my way of thinking it makes good sense to use the bes...

By: Sara Rossl Uncategorizedl Jul 08, 2018 lViews: 46 lComments: 0
Add new Comment

* Required fields