In the few past blogs in this series we have discussed how to cure defaulted student loans through consolidation of loans or rehabilitating loans.Also we have touched upon the importance of knowing which option is best for each person who is facing default.This makes it more difficult and time-consuming to manage loan payments. But before taking this road, you must understand what loan consolidation is, how it works, and the merits and demerits of student loan consolidation.
Don't just call the company or school that gave you Fi Eligible federal student loans can be combined into one Direct Consolidation Loan.
Loan Consolidation Advantages/Disadvantages • Consolidation eliminates multiple payments to multiple lenders or servicers, giving you a new loan with one any other outstanding federal student loans you have.
Please read There may be advantages to consolidating (combining) your Federal student loans into one loan, starting with the convenience of making a single monthly payment.
Rehabilitation has its advantages also; the main one being that rehabilitation removes the default notation on a credit report completely, while consolidation results in a notation on a credit report that the defaulted amount was paid in full.
With consolidation you can lose out on other rights you otherwise have, such as with a Perkins loan borrowers would lose their cancelation rights if they were to consolidate with Direct Loans.