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Federal Student Loan Refinancing
Federal Student Loan Consolidation is a financing facility that allows a borrower to merge his several federal student loans into a single new loan, and thereby bring them under one repayment plan. Federal student loans are generally issued or guaranteed by the United States government and comprise loans from the US Department of Education as well as the Department of Health and Human Services. These do not require any collateral security, and in contrast to private student loans, have low rates of interest. The Stafford loan is one of the most popular federal student loans.
When a borrower consolidates federal student loans, the original federal student loans are paid off by a loan consolidation company or by the Department of Education. Then, a new loan is created with one monthly payment. One of the prime advantages of federal student loan consolidation is that it lowers ones monthly payment by up to 60%. Low fixed interest rates, reduced monthly payments, and retention of subsidy benefits are other merits. Federal student loan consolidation offers several flexible repayment options and varied deferment options to choose from. Depending upon the amount of the debt amount, the repayment period extends from the standard 10 years to 30 years.
However, certain conditions are to be met for availing federal student loan consolidation. Only loans with an outstanding amount of $7,500 can be consolidated under this scheme. Private student loans are not eligible for federal student loan consolidation. Federal Perkins Loans, Federal Stafford Loans (both subsidized and unsubsidized), Health Professions Student Loans (both subsidized and unsubsidized), Health Professions Student Loans (HPSL), Nursing Student Loans (NSL), Federally Insured Student Loans (FISL), Auxiliary Loans to Assist Students (ALAS), Federal Supplemental Loans for Students (SLS), National Direct Student Loans (NDSL), Health Education Assistance Loans (HEAL), Federal Parent Loans for Undergraduate Students (PLUS), and Loans for Disadvantaged Students are eligible for consolidation.
VA Loans
A VA (Department of Veterans Affairs) loan is designed to assist the heroes who served in our armed forces and helped protect our country. Any retired soldier can obtain VA loans, even if they only served during peacetime. There are several eligibility requirements that you should know about when determining of you are eligible for a VA loan.
Retired soldiers who have served a certain span of time are eligible. The required period of time that you must be enlisted varies depending on whether you were active during peacetime or a time of war. During a war, eligibility is given after 90 days of service, but eligibility during peacetime requires 181 continuous days. Wartime and peacetime are actually defined as certain calendar periods. For more information, contact your local VA. Its important to note that if you were dishonorably discharged, you are ineligible regardless of the amount of time you served.
Some spouses are eligible for VA loans, too. If you are the spouse of a POW or a soldier missing in action, you may be eligible. Also, a spouse (who did not remarry) of a soldier who died while serving, or due to a service related disability, may be eligible. Contact a VA loan official to discuss your eligibility.
If you fulfill the requirements, contact a VA loan organization for a copy of Form 26-1800 (request for a Certificate of Eligibility) and fill it out. You local VA may be able to assist you in finding loans, but they wont respond to requests for eligibility forms. That must be handled through the actual loan organization.
You are also eligible if you are still currently on active duty, as long as you have served the required number of days (depending on wartime or peacetime). If you arent in any of the above categories of eligibility, you can become eligible after serving 6 years on Selected Reserve. This six-year requirement doesnt have to be consecutive. Again, a dishonorable discharge from the Reserves will make you ineligible.