“I can’t afford to make my monthly repayments on my federal student loans as my salary is not sufficient for me to do so.”

Can this problem be solved?

The answer is YES. You can take the proactive step to consolidate all your federal student loans. The method is very beneficial especially during economy downturn where the interest rates are relatively lower. Federal student loan consolidation is designed to extend the period of repayment so that your monthly payment is much lower than what you are paying currently. Based on the calculation, some people are able to lower their monthly payment by as much as 50% after consolidating the loan.

There are basically 4 types of federal government student loan consolidation programs. Let’s take a closer look at them one by one.

• Standard Repayment Plan
This plan offers the fixed monthly payments for a maximum duration of 10 years but it requires the highest monthly payment.

• Graduated Repayment Plan
This plan often starts off with repaying the interest only. These payments will gradually increase until the loan is fully paid. This plan costs more in interest payments when it is compared with the first plan. It is the most ideal plan for the fresh graduates as they only need to make little payment when they have just started working with low salary.

• Extended Repayment Plan
This plan offers a longer repayment period than the standard plan. The period can be extended up to 30 years but the interest rate is higher.

• Contingent Repayment Plan
Under this plan, the amount of repayment is determined by your income, your total outstanding balances and the size of your family. The repayment period can be up to 25 years.

Don’t worry when your current income is not sufficient to pay off your study loans. Go for federal student loan consolidation. It will assist to ease your financial burden.