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Loan Consolidation
Federal Consolidation Loan applications must be postmarked by May 31, 2008 to be
accepted by Bank of North Dakota due to program changes effective June 1, 2008.
Education loans are an excellent source for students and parents paying for the costs of college. Borrowing money to finance college will have long-term implications. The amount of debt incurred must be properly managed and controlled and kept to a minimum. Remember, prompt payments create a good credit rating for you!
When to consider loan consolidation?
If after exploring forbearance, deferment and repayment options, your student loan payments are unmanageable, this is when you may wish to consider consolidation. The Loan Consolidation program allows you to combine eligible loans, plus extend the repayment over a longer period. A defaulted loan may be included in a loan consolidation if the borrower has made satisfactory arrangements with the holder. The advantages and disadvantages should be thoroughly discussed with your lender.
How do you qualify?
To qualify for a loan consolidation, you must be in a grace period or in a repayment status. Outstanding student loan debt from any of the following programs may qualify for loan consolidation:
- Federal Insured Student Loan (FISL)
- Federal Subsidized Stafford Student Loan
- Federal Unsubsidized Stafford Student Loan
- Federal Nonsubsidized Stafford Loan
- Federal Supplemental Loan for Students (SLS)
- Federal Perkins Loan (formerly NDSL)
- Federal Consolidation Loan
- Federal Parent Loan for Undergraduate Students (PLUS)*
- Federal GRAD PLUS (PLUS PRO) (loan for professional/graduate students)
- Ford Federal Direct Subsidized Stafford Student Loan
- Ford Federal Direct Unsubsidized Stafford Student Loan
- Ford Federal Direct Parent Loan for Undergraduate Students (PLUS)*
- Ford Federal Direct GRAD PLUS (loan for professional/graduate students)
- Health Education Assistance Loan (HEAL)
- Health Professionals Student Loan (HPSL)
- Loans for Disadvantaged Students (LDS)
- Nursing Student Loan (NSL)
*Students may not include PLUS loans that were borrowed for them by their parents.
Contact your lender, loan repayment center, or Student Loans of North Dakota
(SLND) at 1-800-472-2166 ext. 5660 if you have questions regarding loan
consolidation.
What is Consolidation? If you have more than one type of education loan, or have borrowed from
more than one lender, you may be able to combine some or all of your loans
into one new loan with one monthly payment.
Determining if Consolidation is Right for You:
When Can I Consolidate Loans? Anytime during your grace, repayment or deferment period. If you want to take advantage of your full grace period, submit your application for consolidation two months before your grace period ends.
What Happens When I Consolidate a Loan?
- Your previous loans are paid off by the consolidating lender who then issues you one new loan. The borrower has 180 days following the date a Consolidation Loan is made to:
- add loans received prior to the date the consolidation loan was made.
- add loans received following the date the consolidation loan was made.
- The repayment time in which you will repay your loan may be extended and could result in lower monthly payments.
- There is no fee to consolidate; however, the cost of paying off a loan will include any accrued interest, late charges, and the current principal balance. If defaulted loans are included in the Consolidation Loan, the payoff amount may include collection costs.
Borrower Eligibility: Borrowers interested in the Consolidation Loan Program should investigate it thoroughly, as some conditions of their existing loans may change - i.e., interest rate, deferment options, etc.
Application Process: Neither BND nor Student Loans of North Dakota-Guarantor (SLND-Guarantor) will assess charges to the borrower for the guarantee or origination of a Federal Consolidation Loan.
Federal regulation does permit the assessment of an administrative fee to lenders to cover the costs of increased or extended liability for Federal Consolidation Loans.
Are There Any Fees or Charges? There are no fees, pre-payment penalties, or service charges for the consolidation process.
Repayment Terms: The borrower must begin repayment within 60 days of disbursement. The length of the repayment period varies according to the sum of the beginning balance of the Consolidation Loan and the amount of the borrower's other education loans. If a student receives a deferment or forbearance, the repayment period could be longer than what was originally scheduled.
Loan Consolidation Chart: Click Here to go to a chart showing eligible loans, repayment, deferment, interest rates and eligible borrowers. You may also use the Loan Consolidator Worksheet to determine your estimated monthly payment amount should you decide to consolidate your loans.
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