Student Federal Loan Debt Counseling - Overview On Federal Debt Consolidation

The main objective of the student federal loan debt counseling services is to combine all the outstanding federal student loans for obtaining lower monthly payable amount. Suppose you owe the debts of multiple government approved student loans, you can take advantage of this counseling service to consolidate your multiple loans into a single loan. Take responsibility of single monthly installments instead of multiple loan installments which also vary in interest rates. However, students or their parents need to comprehend various repayment options of these consolidation programs before signing the deal of a student debt consolidation program.

Repayment Options Of A Federal Loan Debt Counseling Service

There is a variety of repayment options available for student federal loan debt counseling programs. The four main types of debt repayment options available with the federal debt consolidation programs are,

  1. Standard Repayment Plan - The standard repayment plan is a payment plan that enables borrowers to make equal amounts for the entire duration of the repayment term. Each installment for student federal loan debt counseling includes shares for principal and the interests. This plan features the highest initial payment resulting into lowest amount of interests paid.
  2. Graduated Repayment Plan - As the term refers, the payment amount as per this plan, graduates from low payment amount towards increasing amount for over the period of loan term. This plan allows users to pay interest-only-installments for the first or third quarter of the repayment period and continues to amplify with the remaining period.
  3. Income-Sensitive Plan - This repayment plan is designed taking account of the amount received as the gross salary of the users as well as the amounts borrowed. The repayment term is determined on the basis of the percentage users request while student federal loan debt counseling, income status of consumer and loan amount taken.
  4. Extended Plan - Using the extended payment schedule, borrowers can extend their fixed or graduated payment plan for over 30 years of duration. In such cases, borrowers who have taken a student federal loan debt counseling loan more than $60,000, are granted with extension of the repayment period.

The repayment term of a student federal loan debt counseling service generally begins after you receive a Federal Loan Consolidation Disclosure Statement and Repayment Schedule. Instructions related to schedule of repayment are stated in this student loan debt consolidation disclosure.