We help you in Consolidating your Debts

Government debt consolidation loans are types of loans provided by different government programs for repaying a number of loans. This allows a debtor to make a single monthly payment rather than making three or four monthly payments to various lenders. This is the rationale of debt consolidation. You can also lower your interest rates with the help of debt consolidation.

The U.S. Federal Government has designed different debt consolidation programs especially to assist students in debt so that they are able to minimize and get rid of their debts promptly. Students usually have credit card debts, student loans and outstanding medical bills that always push them towards a situation of overwhelming debt. The original federal education loans are repaid by the Department of Education in the United States and a new loan is provided for the consolidated amount of the earlier loans. This is carried out as a part of the Direct Consolidation Loan Program.

The Direct Consolidation Loan Program and the Federal Family Education Loan (FFEL)

Program are programs that come under the Higher Education Act or HEA and grant loan consolidation. This functions by providing a new consolidation loan to the debtor which is utilized to repay the present loans of the debtor.

The debtor might have obtained these loans from different creditors under different terms and conditions, as well as repayment periods. Repaying a number of loans with the help of a single loan and the necessity of only a single monthly payment assists the debtors to make payments on time at a reduced interest rate. In case of a government grants, debt consolidation loan, the amount of monthly payment is usually less. In addition, there is higher transparency in terms of the rate of interest payable, the repayment term and the due date for payment. Generally, the repayment term can be extended to simplify the repayment procedure and lower the monthly payments.

There are four plans for the debtor under the government debt consolidation program and they are the following:

• Extended payment plan
• Standard plan
• Income contingent repayment (ICR) plan
• Graduated payment plan

Every plan has attributes that are appropriate for the condition of the debtor and therefore offers the flexibility that is needed from a debt consolidation program.