When a student has several Federal Student Loan, they easily get confused with the repayments and information related to it. If you're thinking of refinancing your Federal loans, you can get relieved by tracking your numerous loan bills, thereby paying one single amount to all your other loans.
If a student has a Federal Student Loan, then they must have a loan servicer. Great Lakes is one of the major service provider used by the Federal Government to service Federal Student Loan. They act as an intermediary between borrowers and the Department of Education.
This service provider administers the loan, handles repayment, customer service, and more. Great Lakes was recently acquired by another Federal Loan servicer called Nelnet, still, it works on its original name.
List of contents
- Great Lakes Federal Student Loan Servicer
- Refinancing with private lenders
- Steps to Refinance Loan
- Advantages and Disadvantages
- Choosing Consolidation or Refinancing
- Direct Consolidation Loan
- Consolidation your Great Lakes student loans
Great Lakes Federal Student Loan Servicer
Great Lakes is a Federal Student Loan service provider that provides opportunities to student borrowers to avail Federal student loan funded by the US Department of Education. If a student has multiple Federal Loans, he/she gets an option to combine all the loans together, pay one single monthly repayment for all the loans. It is basically taking out another new loan to pay off all your Federal Student Loan for you, by replacing multiple Federal loans with a single new loan.
Great Lakes does not provide federal loan borrowers the services like consolidation and refinance. These services can be availed with Direct Consolidation Loan with Private Lenders.
Refinancing Federal Student Loan
There is no option to refinance your Federal Student Loan by Great Lakes, but it can be done by private lenders. When you refinance your Federal Student Loan with a private lender, this loan will be converted to a private loan. Read more on student loan refinancing
Refinancing with private lenders
Federal Student Loans cannot be refinanced by Federal Loan servicers. It can only be refinanced by Private Lenders. This option can be chosen by the borrowers not only to consolidate the loan but also to reduce the interest rate payable.
By refinancing these loans, you get to consolidate multiple loans with single monthly repayment, wherein Direct Consolidation Loan can combine multiple Federal loans, but refinancing helps to consolidate both Federal and Private loans.
Terms and interest rate
Refinancing would not only provide an option to choose terms but also help to lower the interest amount payable. Fixation of interest rate mainly depends on borrowers credit score and financial position. In cases where the borrower has less credit score and get unqualified, there are options for such borrowers to have cosigner whose credit score is good to avail refinancing.
This benefit of refinancing at a low-interest rate is that it ultimately reduces total cost, and the option of reframing terms is the main reason why borrowers refinance Federal Student Loan. This refinancing helps to choose loan terms. Some borrower does choose a long term to reduce monthly repayment while others tend to choose a short term to get debt free earlier than the actual period.
Refinancing made feasible
Refinancing Great Lakes Students loan with a private lender is very much easy. This is done by evaluating many lenders since one of them would be chosen to refinance your loan. Thus comparing several refinance service provider helps borrowers to determine the best refinancer with borrower-friendly features.
Steps to refinance loan through Great Lakes
The borrower must be wise in deciding the private lenders by comparing the interest rate they would offer.
Lenders have their own criteria to be fulfilled by the borrowers to enjoy comparatively less interest rate, but the borrower can compare the interest rate of the various lender by using online loan calculator at the same time
Online lenders would have a process to fill all related information on an online application, the borrower has to fill in details of current student loan and information of work and salary.
The lender makes detailed checks on borrower's financial position and credit score to make an initial offer. Once your refinance gets approved with a private lender, all communication-related to refinance will be done with Great Lakes.
Advantages and Disadvantages
A great benefit you get by refinancing is that the borrower has an opportunity to lower the interest rate payable and this could bring down the monthly repayment.
A borrower who refinances may save up to $253 per month as this could be a great option to lower total cost. An average borrower who refinances can save about $16,000 over the life of the loan.
Refinancing can help one to replace different Federal Student Loan with one single loan, which helps borrowers to manage the loan and payoff easier.
It helps borrowers to decide in reframing the term of the loan, choosing between lengthening the term to reduce monthly repayment or shortening the term to get debt-free sooner, by paying less interest amount with higher monthly repayment.
A borrower has to be very clear or aware of the consequences of refinancing federal student loan by a private lender.
When a borrower actually refinances a federal student loan, it ultimately converts into a private loan. This process would result in a borrower losing all the benefits from Federal programs such as Public Service Loan Forgiveness and Income-Driven Repayment Plans.
The private lender also provides this similar benefits to its borrowers in the period of hardship, but it's not the same as the Federal government.
Choosing between Consolidation and Refinancing
It’s a borrower's decision to consolidate or refinance Federal Student Loan offered by Great Lakes, as this option helps the borrowers to enjoy great benefits.
A federal student loan can be consolidated through Direct Consolidation loan, as this program does not help in bringing the interest rate low, but could help in consolidating more than one Federal Student Loan.
Refinancing Federal Student Loan can help borrowers to lower their total cost and save on the loan payable. This option has its own advantage and disadvantage too. A borrower can choose any of the options they fell feasible for them.
Direct Consolidation Loan
Consolidating loans is a better option for the borrowers who have multiple student loans but the consolidation of Federal Student Loan can be possible only through Direct Consolidation Loan.
Private Student Loan can't be consolidated under Direct Consolidation Loan, this provides an option to bring all the Federal student Loan as one.
It becomes feasible when the consolidated loan becomes one loan and that one loan bill is paid instead of multiple loans.
This option allows borrowers to choose loan terms, where a borrower can choose a term of 10 years to 30 years. The longer the term, the higher the interest rate the borrower gets to pay and vice versa. Choosing short term helps to get debt-free sooner as monthly repayment would be high.
With all these benefits, it is best to choose a service provider based on the low-interest rate to be paid and if a borrower wants to get refinanced with Great Lakes or other Federal Loan service provider, their interest rate must be put into consideration.
Consolidating your Great Lakes student loans
Great Lakes consolidation involves taking all of the separate loans that Great Lakes services for you and turning them into one federal Direct Consolidation loan. From there, you can leave your loan with Great Lakes or select another consolidation loan servicer.
Here are the steps you’ll have to take to apply for your student loan consolidation:
1. Prepare your application information
First, collect all the data that are required in the application process so that you can finish the loan consolidation application in one session. In the application they will ask you to pick a repayment plan that fits your financial situation best, for this, you can use Great Lakes’ Repayment Planner to identify your collect planner and compare other plans too. This process is now very easy as by just login you can choose the planner and complete the application process faster. Here it also helps in analyzing the other repayment plans with different terms to pay back your consolidation loan so choose that plan which helps you in saving the most.
2. Estimate your monthly payment
For estimating your monthly payment you can check on student aid official site where you will get an option to select “Consolidate My Loans” under the “Manage Loans” tab in this you can try a You can do a student loan consolidation demo to calculate your monthly payment.this will help you through the consolidation process and get an estimate without completing an official application.
3. Apply for student loan consolidation
You can visit the student aid government site to start the application process in which you need Federal Student Aid ID to log in and in that you can select one of the federal; student loan servicer to finish the consolidation and service your direct consolidation, Great Lakes as considering one of the good choices because of its fast and convenient process
4.Track your application
If you select Great Lakes as your student loan servicer, you can expect to hear from the company within one to two days after you submit your application and will notify with up to date throughout the consolidation process like when your application was received, any further action is needed and when the process will be finished giving a borrower an idea that how time will be required and you may also be able to monitor your application through your Great Lakes account
Confused about borrowing money for college? Learn about student loans and get your queries cleared
Refinancing Federal loan with Great lakes is not possible but loans can be consolidated from them under Direct Consolidation Loan.
It is possible to refinance Great Lakes Student loans through Private Lenders, where borrowers are free to decide the private lender to refinance their loan. Through refinancing the loan, it would get converted to a private loan where the borrower ultimately cannot get benefits from Federal Programs.
Refinancing Great Lakes student loans with private lenders would help borrowers to lower interest amount payable, a borrower gets an option to choose loan terms and can save a huge amount on the total cost.