Consolidating federal loans


04-Apr-2020 18:02

To rehabilitate your loan, you must choose one of the two payment amounts.Your loan holder may be collecting payments on your defaulted loan through wage garnishment or Treasury offset (taking all or part of your tax refunds or other government payments).Late payments will remain on your credit report for seven years from when they were first reported.It’s important that you fully understand loan rehabilitation and loan consolidation before making your decision.These involuntary payments may continue even after you begin making payments under a loan rehabilitation agreement, but they can’t be counted toward the required nine voluntary loan rehabilitation payments.Involuntary payments may continue to be taken until your loan is no longer in default or until you have made some of your rehabilitation payments.Once you have made the required nine payments, your loans will no longer be in default.

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Depending on your individual circumstances, this alternative payment amount may be lower than the payment amount you were initially offered.

Learn more about loan rehabilitation and loan consolidation.