Consolidating student loans that are in default
Ford Federal Direct Loan Program, it’s possible to combine one or more federal student loans into one new loan.
There are various repayment options under the Direct Consolidation Loan program, including a standard repayment plan, a graduated repayment plan, an extended repayment plan, the Income-Contingent Repayment Plan (ICR), the Pay As You Earn, and the Income Based Repayment Plan (IBR).
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It’s a leader in the field; in 2012, it was the first company to start refinancing federal and private student loans together.
Why it’s worth a look: They’re currently offering fixed interest rates of 3.49% to 7.94%, and a variable interest rate of 2.27% to 7.84% (that includes an auto-pay discount of 0.25%).
Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. Lowest variable rate of 2.27% APR assumes current 1 month LIBOR rate of 2.27% minus 0.15% margin minus 0.25% ACH discount. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above.
For the So Fi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly.