Government debt consolidation loans are a specific and separate category of loans offered by our government to help qualifying students release themselves from the burden of debt. Not everyone who applies for government based debt consolidation will qualify, but it can never hurt to try. As the saying goes, where there's a will there's a way. This option may not be for everyone, but it's certainly a consideration for those students fortunate enough to get help from Uncle Sam.
Most of these loans are available to only students through the Higher Education Act (HEA). Most of these programs come from the Federal Family Education Loan (FFEL) and Direct Loan Programs. These programs help students who have debt from many lenders to consolidate their payments into one affordable monthly payment.
Debt consolidation works to reduce the amount of interest you are paying on your loans by eliminating them. Then, they take out a larger loan for you with a lower interest rate than you were accumulating with the other loans. Because you fell into debt in the first place, you will be unable to secure a loan of this size by yourself. This is where debt consolidation comes in. Legitimate no-profit organizations that are government approved can help you secure the loan you need to pay them all off and ensure your credit score doesn't go down because of falling behind.
Many times student will end up having to pay back a large loan amount for their education while at the same time managing credit card debt or other personal loans. If you are in this type of situation a government debt consolidation loan would be perfect.
"Are your monthly payments manageable? If you have trouble meeting your monthly payments, have exhausted your deferment and forbearance options, and/or want to avoid default, a Direct Consolidation Loan may help you. Use our online calculator to find out what your monthly payments would be under each of our repayment plans.
Too many monthly payments driving you crazy? If you send payments to more than one lender every month, and want the convenience of a single monthly payment, consolidation may be right for you. With a Direct Consolidation Loan, you will have a single lender - the U.S. Department of Education - and a single monthly payment."
These organizations may be able to offer you a free consultation to discuss your debt options. They may also offer continued counseling and courses on how to keep your debt under control after your crisis. Working for a living isn't easy to begin with. Going into debt can bring things to a traumatic point break. Do yourself a favor! Put all the time, effort, and motivation you have left into finding a reputable and successful debt consolidation company to do business with. It will be one of the smartest business decisions you could ever make. Don't take this decision lightly and be sure to carefully think about your financial recovery plan.
Please be careful of scams that are infiltrating campuses and the internet. Here are some tip-offs to rip-offs from the FTC.
Steer clear of debt negotiation companies that:
- guarantee they can remove your unsecured debt
- promise that unsecured debts can be paid off with pennies on the dollar
- require substantial monthly service fees
- demand payment of a percentage of savings
- tell you to stop making payments to or communicating with your creditors
- require you to make monthly payments to them, rather than with your creditor
- claim that creditors never sue consumers for non-payment of unsecured debt
- promise that using their system will have no negative impact on your credit report
- claim that they can remove accurate negative information from your credit report.
These government programs can be a great source of incredible financial stability if you qualify. You can collect your composure and regain your financial foot hold in life. So if you are in a situation were your debt has become unmanageable, it would be very wise of you to give a government debt consolidation company a call for a free consultation to see if you qualify.