Borrowers who choose to consolidate student loans follow a general process for consolidating and then paying off their loans. Here's an outline of that procedure. For questions about this sequence of events or to learn more, contact your consolidation lender.
- Selecting a lender — If you decide to consolidate, it is important that you choose your lender wisely. To help you to make this decision, start by contacting the lender(s) or servicer(s) that holds your loans to discuss consolidation. But keep in mind that you can consolidate with any lender that participates in the Federal Consolidation Loan Program.
Important note: Due to market conditions, many lenders are not currently offering consolidation loans. If you are considering student loan consolidation, please contact your existing lender(s) for more information about possible consolidation options. - Completing an application — The borrower secures application forms from a lender or TG, completes the forms, and submits them to the lender he or she has selected for consolidation. Neither TG nor a lender may charge a borrower a federal default fee or an origination fee for a Consolidation loan.
- Exchange of loan information between lenders — The consolidating lender sends a Verification Certificate to the holder(s) of each loan to be consolidated. The holder has 10 business days from the date it receives a Verification Certificate to respond to the consolidating lender.
- Consolidating lender pays off other lender's loans — A lender may disburse a Consolidation loan upon receiving the borrower's signed application and promissory note and completed Verification Certificates from the holder(s) of all loans to be consolidated.
- Making payments to consolidating lender — After you receive confirmation that other loans have been paid off, begin making monthly payments to the consolidating lender.
The interest rate on a Consolidation loan is the weighted average of the interest rates — as of the date the application is received by the lender — on all of the loans you are consolidating, rounded up to the nearest one-eighth of a percent. For specific examples, refer to TG's explanation of Consolidation interest rate calculation.
If you decide to consolidate, you should keep in mind that it is best to consolidate at a time and in a way that will be most advantageous for you, particularly with regard to the interest rates of the loans that you want to consolidate. Learn more about specific conditions.
If you have questions about whether you qualify or not, contact your lender first. TG can also help. Call TG customer assistance at (800) 845-6267, or send an e-mail message to cust.assist@tgslc.org.