How Great Lakes Student Loan Consolidation And Refinancing Works

how to consolidate great lakes student loan

Do you want to know how to consolidate great lakes student loan to help you have less financial stress? Most times, it is usually stressful when you manage multiple federal student loans payment, coupled with the various interest rates from different servicers. This could actually hurt your finances.

This article will explain to you how student loan consolidation works, the refinancing procedures, and eligibility requirements. More so, we will also consider the benefits associated with consolidating your great lakes student loan.

Recently, the U.S Department of Education allowed borrowers to be able to their consolidation servicer and the great lakes servicer is among them.

Great Lakes student loan consolidation gives you a simpler and less expensive way to repay your student loans. Consolidation means that you are combining ing all your student loans into one loan and paying off your debt from there.

Example: You took out a student loan from various student loan lenders including Great Lakes. The money comes from different lenders, so you are owing, 4-5 lenders when you graduate.

Each of these lenders you owe has a separate maturity date, interest rates, and the amount you will pay. It might be complicated for you to have a detailed record of these multiple student loans. Hence, it is important you consolidate them into one.

How Does Great Lakes Student Loan Consolidation Work?

Great lakes consolidate your federal student loans using the direct consolidation loan program. That means that all your loans will now be serviced by one lender and you pay one monthly interest payment. The servicer here becomes Great Lakes or Nelnet. The interest rate to be paid on the new consolidated loan is the average of the interest rates on all your federal loans.

Benefits of Great Lakes Student Loan Consolidation

Aside from the fact that consolidation of loans may be the best convenient way to settle, and manage your student loans, are there any other reasons why you should consolidate your loan?

Generally, consolidation gives leaves you with only one lender to pay. This is because your loan will be serviced by just one lending institution and you will pay one monthly payment, one interest rate from one student loan servicer of your choice.

Multiple Repayment Options: A consolidated federal student loan is open to a number of repayment plans that borrowers can choose based on convenience. You can also change the repayment plan at any time. The repayment options are :

  • Revised Pay as You Earn (REPAYE),
  • Pay As You Earn (PAYE),
  • Income-Based Repayment (IBR),
  • Income-Contingent Repayment (ICR)

These plans offer flexibility and lower payments based on your income and family size. You may be able to change plans at any time, based on eligibility requirements. Visit StudentAid.gov  and click on the Repayment and Consolidation tab to estimate your monthly payment under various repayment options.

Fixed Interest Rate: Multiple student loans have different interest rates. When you consolidate your loan, your loan servicer gives you just one interest rate which is the average rate on all the loans being consolidated to the nearest one-eight of 1%.

Eligible for student loan forgiveness: Consolidated loans are qualified for loan forgiveness under the  PSLF program.  You can read more to know if you meet the additional requirement for the loan forgiveness program

Extra Repayment Period/ Forbearance option: A direct consolidation loan is a new loan that restarts the forbearance period up to a period of 3 years. This gives you a long time to repay. More so, if your student loan is already on the grace period when you applied for consolation, you should state on the application when the grace period started and when it ends. This is so that your repayment does not start straight away thereby canceling your grace period.

No Minimum or Maximum Amount: There is no restriction as to the minimum amount or highest amount you can consolidate. If you are indebted to 10$, it still qualifies for consolidation.

Increases your student loan credit score: If you consolidate your loan, you will make your payment easily since you are dealing with one payment. This will avoid default and in the long run, increase your credit score.

How to Be Eligible for Great Lakes Direct Consolidation loan

There are certain eligibility requirements for you to apply for student loan consolidation. They are;

You must have at less one of the federal loans, they include

  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students
  • Federal Perkins Loans
  • Nursing Student Loans
  • Nurse Faculty Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Loans for Disadvantaged Students
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • FFEL Consolidation Loans and Direct Consolidation Loans (only under certain conditions)

You must have your loan to be consolidated in their grace or repayment period. This included deferment, forbearance, or diligent status

  • You cannot consolidate your loan while you are still in school
  • You can consolidate your loan as long as you are willing to pay the new consolidated loan

How to Consolidate Great Lakes Student Loan

Great Lakes loan services allow you to consolidate your loan. If you want to service your loan with Great Lakes follow the steps below or you can choose another consolidation servicer.

Gather all your information because you will have to complete the application process when you log into your Great Lakes account online. Select any of the Repayment Planners to help you choose the best repayment plan for it

Calculate your Monthly Payment: This can easily be one when you go to studentaid.gov and select “Consolidate My Loans” under the “Manage Loans” tab. You can do a student loan consolidation demo to calculate your monthly payment.

Apply for the student loan consolidation: If you are satisfied with the monthly repayment then it s time to make your application. The application process will take at least 30 minutes to complete because you will finish it in one session.

All you have to do is to go to  studentaid.gov to start the application process. You’ll need your Federal Student Aid ID to access the application page.

Select one of the federal student loan servicers to help you complete the consolidation. Great Lakes is a good option for you to go with always.

Monitor and Follow up on the Application: If you decide to go with Great Lakes as your student loan servicer, you should be expecting feedback from them within 48 hours after submitting your application.

Great Lakes always keep you updated with the application process to inform you of the following;

  • The time they received your application
  • If any further action is required from your own end
  • When the consolidation process will be complete

You can also follow up on the application through your Great Lakes student loan account.

Great Lakes Student Loans Refinance vs. Consolidation- Differences

You might be pushed to think that Student loan refinancing and consolidation mean the same thing but they do not even though they have similar effects on loans.

It is normal that you must have used multiple student loans from private lenders and federal student loans to finance your education. These loans have variable interest rates and terms upon which they were offered. Sometimes, some may have fixed rates and others variable rates.

Read More: Great lakes Student Loan Forgiveness, Cancellation, Discharge

Student loan refinancing is a mechanism that can only be done with a private lender that helps you to combine all your loans ( both private and federal government loans) into a single loan. The newly refinanced loan will have a new interest rate and it could be lower if you have a good credit score for student borrowing.

While a Federal loan consolidation is when you combine all your existing federal loans into a single loan with a servicer like Great Lakes. The federal government does not allow you to consolidate private loans, unlike student loan refinancing.

EXAMPLE:  If you have six federal student loans, for example. Three of them have interest rates of 5%, while the other three have rates of 7%. The new interest rate if you consolidate would be 6% based on the weighted average. Thus, three of your loans will see a rise in interest rates, while the remaining three will see decreases. Nevertheless, consolidation would result in a single loan with a 6% interest rate.

Great Lakes Student Loan Refinance Process

You should know that if you want to refinance great lakes student loans, you are going to move your federal loan to a private loan servicer which is great lakes. The benefit for you is that you will enjoy a lower interest rate subject to your credit score.

However, refinancing a Great lakes student loan means that you are waiving the benefits of federal student loans which include the following;

  • You will not be qualified for the student loan forgiveness program since you have a private loan
  • You will no longer have access to income-driven repayment plans like Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE).

Read More: How to Manage Gov Uk Student Finance Login Account Online

Notwithstanding the above cons of student loan refinancing, here are the steps for you to take if you still want to know how to consolidate great lakes student loan and refinance;

Arrange Your personal information and Documentations: The demand for documents and information varies from lender to lender. However, the standard documents required generally are;

  • Recent payment receipt from your current employer
  • Current private and federal student loan statements
  • Bank account information
  • Valid photo ID

NOTE: Make sure you have a good credit score before you apply for student loan refinancing. This is because the lender uses the credit score to determine your interest rate for the refinanced loan. You can see how to improve your credit score overnight to help you get a lower interest rate for the loan.

More so, if you have been diligent in making your Great lakes student loan payments up till the moment of your application, you will not bear the chances of having a high-interest rate.

Compare Lenders’ Rates: This is a good practice for you to ensure that you find the best student loan refinancing rates from lenders. You will need to use a “SOFT” credit check to do that and it won’t affect your credit score.

Read More: How to Manage Great Lakes Student Loans Account

Thereafter, you can choose the rates that sit well with you. It is important that you compare the rates with what Great lakes student loan offers you.

Apply for student loan refinancing: Complete your formal refinancing application with the private lender of your choice. The evaluation procedure will likely take a few weeks.

Till your new lender accepts your application, continue making payments on your Great Lakes student loans.

FAQs About How to Consolidate Great Lakes Student Loan and Refinancing

Q: Does private student Loan qualify for student loan consolidation

ANS: No consolidation of private loans. The Federal Consolidation Loan Program does not allow for the consolidation of student loans from private institutions or lenders. On the other hand, some private lenders permit loan consolidation that may include federal loans, although the interest rates on private consolidations are typically substantially higher.

Q: Does student loan consolidation Affect your credit score?

ANS: Great lakes student loan consolidation and refinancing do not affect your credit score because there is no credit check done on your account.

Q: How many times can you consolidate Great Lakes student loans?

ANS: A consolidation loan can only be combined once. You must include loans that were not previously combined in the consolidation loan if you want to reconsolidate an existing consolidation loan. Additionally, you may combine two consolidation loans. A single consolidation loan, however, cannot be combined with any other loans.

Q: Can I consolidate my student loans while in school?

ANS: You are generally allowed to consolidate your loan when you leave school and graduate.

Q: How long does it take to consolidate student loans?

ANS: It takes time to consolidate federal student loans. A Federal Direct Consolidation loan typically takes a few weeks to process, but it occasionally takes months. It usually takes 30-45 days to consolidate.

Q: Does Federal student loan consolidation Reduce interest rates?

To qualify for some federal loan repayment programs, you might need to consolidate, but doing so won’t lower your interest rate. It could reduce your payments by increasing the repayment period.

Conclusion

I believe you know understand how to consolidate great lakes student loan and the option of refinancing your student loans. Go over them again and compare the rates with and apply for the consolidation. Do not forget to share this article using the social media button to support us.

About LIFEACK.COM

Lifeack.com is owned and managed by Peter Okonkwo. A corporate lawyer, and financial analyst. He has years of experience in insurance, mortgage, and personal loans. He loves writing and playing football. You can contact him through the contact us page.

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