Great Lakes student loan consolidation involves getting a federal Direct Consolidation Loan. This consolidation program allows you to combine your multiple federal Great Lakes student loans into one new policy to make convenient, single monthly payments.
Great Lakes offers both federal and private student loans, so you can pay off your student loans through Great Lakes without changing their type. Still, getting a Direct Consolidation Loan gives you the chance to change your student loan provider to another federal servicer.
Although you can keep Great Lakes as your primary student loan servicer, note that you may have to change servicers by the end of 2021. Great Lakes’ federal contract ends by December 2021, which may change the status of your Great Lakes student loans.
Still, you can combine your federal Great Lakes student loans while they remain eligible for the federal consolidation program. Otherwise, you could refinance them with a private lender before their statuses possibly change. Here’s a closer look at your options.
Consolidation only applies to federal Great Lakes student loans because the process involves the federal government’s Direct Consolidation Loan program. Consolidating federal Great Lakes student loans combines multiple loans into one new policy.
While applying for consolidation, you can select new repayment terms. You may choose between the standard 10-year plan or a more extended 30-year plan. Longer repayment terms mean you have more time to pay off your loan, which could also lower your monthly payments. However, a longer term may also mean that you would pay more interest over time.
Your interest rate may also increase when you consolidate your Great Lakes student loans. Your consolidated loan’s interest rate will depend on the weighted average of your existing loans’ rates, rounded up to the nearest one-eighth of a percentage.
Refinancing Great Lakes student loans involves combining them into one new policy through a private lender. You can combine both federal and private student loans by refinancing. Your new loan will be a private loan. As such, you will lose access to federal student loan benefits like forbearance and student loan forgiveness.
You can also select your new repayment terms when you refinance your Great Lakes student loans. Choosing a shorter repayment term may allow you to get out of debt sooner, while a longer repayment term decreases monthly payments. Be sure to compare your options with multiple private lenders for the best repayment terms.
Different lenders also have variable interest rate offers. As private lenders, they would base your interest rate on your credit standing and financial situation. You could also apply for refinancing with a cosigner with the right qualifications. Good credit scores and steady income would help get you a lower interest rate.
You can consolidate your Great Lakes student loans by applying for a federal Direct Consolidation Loan. You can only consolidate federal Great Lakes student loans with the federal government’s consolidation program. Private Great Lakes student loans are ineligible for consolidation.
Refinancing allows you to combine your private student loans into one new policy. You may also combine them with federal student loans. However, you will lose federal benefits when integrating federal and private student loans into one new policy by refinancing.
Be sure to weigh your options and assess your goals for wanting to combine student loans.