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Loan Consolidations

The Direct Consolidation Loan offers borrowers with multiple federal loans and high balances the opportunity to consolidate (combine) those loans into a single federal loan with one, usually lower, rate of interest.

Consolidated loans typically involve repayment over a longer period, which reduces the monthly payment to a manageable amount. The extended repayment period sometimes also leads to a higher total amount to repay over the term of the loan, due to accruing interest. Loan consolidation can offer the following benefits:

  • Reduce the number of loan payments you must make each month
  • Lower your total monthly education loan payment amount
  • Help you avoid loan default or poor credit rating
  • Help you return a defaulted loan to good standing

Some features of the original loans, such as grace periods and special forgiveness clauses, may not be a part of the consolidated loan. Terms of consolidated loans should be examined carefully to ensure that the benefits exceed the costs for the individual borrower.


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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.