1. What is a
Federal Consolidation Loan?
A Federal Consolidation Loan
combines several existing federal student loans into one new loan. You can lock
in a single fixed interest rate and enjoy the convenience of one lower monthly
payment.
2. How is the interest rate
calculated?
The interest rate on a Consolidation Loan is set
according to federal law, and is the weighted average of the interest rates on
the loans being consolidated, rounded up to the nearest one-eighth of one
percent. This rate is fixed for the life of the loan and cannot exceed 8.25%.
You may be able to take advantage of a rate as low as 5.375% .
3. How can I consolidate my loan
with the grace rate?
You have the option of consolidating
your loans during your grace period and taking advantage of a rate as low as
5.375%
. It is important to remember that you must indicate the month and year of your
grace end date in #26 of the Consolidation Loan application if you would like to
hold the processing of your Consolidation Loan until the end of your 6 month
grace period. The rates in effect at the time that you apply for your
Consolidation Loan will be used in the weighted average calculation to determine
the rate of your Consolidation Loan. Keep in mind that if you choose to hold the
processing of your loan until the end of your grace period, your existing
variable rate loans may be subject to a federal rate change that occurs on July
1st. Interest will accrue on those loans at the higher rate until your new
Consolidation Loan is processed.
4. Will the reduced interest rate
that I am receiving due to borrower benefits on my existing loans be used to
calculate the fixed interest rate on my new
consolidation?
No. Interest rate reductions received as
borrower benefits on existing loans will not be considered when determining the
applicable interest rate on your Consolidation Loan. For example, if the
applicable rate on your existing loans is 6.80%, but you were receiving interest
rate reductions as a borrower benefit that reduced the interest rate to 5.80%,
the interest rate used to calculate your new Consolidation Loan interest rate
will be 6.80%.
5. How can I find out what my
Consolidation Loan payment will be?
To estimate what your
payments and total amount of interest paid may look like, use our Loan
Consolidation Calculator. After your application has been processed, you will
receive a disclosure and monthly account statement that will include your exact
payment amount and interest rate.
6. How do I know if I am
eligible?
If all of your federal loans are in grace,
repayment or in a deferment/forbearance, you may be eligible for a Federal
Consolidation Loan. Your loans that are in an in-school status cannot be
consolidated until you graduate or leave school. If you have defaulted on any of
your loans, you need to have made satisfactory payment arrangements with your
current holder and provide evidence of that to Citibank. Loans subject to a
judgment or wage garnishment are not eligible for consolidation.
7. Can I consolidate my loans while
I am attending school?
If you are currently a full- or
half-time student, you cannot apply for a Consolidation Loan until you graduate
or leave school. For loans disbursed prior to July 1, 2006, the interest rate
during your grace period is 0.60% lower than the Stafford repayment rate. By
consolidating while you are in grace, you will have the opportunity to secure a
lower interest rate and start paying down your student loans.
8. Can I get an in-school deferment
on my consolidated loan?
If you are attending school at least
half-time you will be eligible for an in-school deferment on your Consolidation
Loan. Keep in mind that you will need to begin repaying your Consolidation Loan
immediately upon graduating, withdrawing, or dropping to less than half-time
enrollment status. Citibank offers a special Consolidation Loan four-month
Lender Option Forbearance that may be considered to help you ease into
repayment. Parents can choose to defer payments if they are experiencing
financial difficulty while their child is in school.
9. How do I apply for a
Consolidation Loan?
Apply today to lock in a fixed interest
rate. Citibank offers you three ways to apply for a Federal Consolidation
Loan:
Apply & sign online using
Citibank's Online Consolidation Loan Application. Let our online application
guide you through the application. It's fast, secure and easy!
Complete instructions
on how to fill out and where to send your application are included. You must
have the Adobe Acrobat Reader Software, Version 3.0 or greater, installed on
your computer in order to view and print the application.
Use our
online form to request an application be sent to you by mail.
10. What is the maximum/minimum
loan limit for a Consolidation Loan?
There is no minimum or
maximum limit to the dollar amount you can consolidate.
11. How do I check the status of
my Consolidation Loan application?
To check the status of a
Consolidation Loan Application, please call our Customer Service Department at
1-800-967-2400 Monday - Friday, 8:00 a.m. to 11:00 p.m. Eastern Time to speak
with a Citibank Customer Service Representative. TDD users can call toll-free at
1-800-846-1298.
12. How much is this going to
cost?
There are no application or processing fees. And, there
is no penalty for early repayment.
13. What if I forget to
consolidate one of my eligible student loans?
You can add an
eligible student loan that you forgot to consolidate into your new Consolidation
Loan if the loan is added within 180 days of the original date of your
Consolidation Loan. If more than 180 days have passed you'll need to complete a
new Federal Consolidation Loan application.
14. If I have already consolidated
my student loans, can I enter into a new Consolidation
Loan?
Once you have consolidated your student loans, you can
only enter into a new Consolidation Loan if you either have an eligible student
loan that was never consolidated or you get a new eligible student loan after
the date of the original consolidation.
15. Once my student loans are
consolidated, is there a way to "unconsolidate" them?
No. The
original student loans are paid in full and cannot be recreated. Once
consolidation begins, there is no way to reverse the process.
16. Should I keep making payments
on my student loans while I'm waiting for my consolidation loan to be
processed?
Yes, continue to make all regular payments. You
will be notified by mail when your Federal Consolidation Loan has been
completed. You will receive a repayment schedule at the time of disclosure.
17. How long will it take for my
application to be processed?
Depending on the number and type
of loans you currently have, it takes approximately 6 to 8 weeks for the
Consolidation Loan application to be processed.
18. When will I have to make my
first payment?
It's usually due within 45 days after the
consolidation has been completed. You will receive a disclosure and a repayment
schedule which identifies your payment due date.
19. Are there any pre-payment
penalties?
There are no pre-payment penalties.
20. Where can I find my student
loan information for the consolidation application?
If you
are in repayment, look on your most recent statement. If you are in grace or in
a deferment/forbearance, look on your disclosure statements that were sent to
you when you obtained your loans. These items should provide you with an account
number, balance and interest rate. If you have some of your loans through
Citibank, you can check those loans online. You can also visit www.nslds.ed.gov.
21. Can I consolidate with
Citibank even if I have not borrowed any of my student loans from
them?
Yes, the federal government recently passed a law that
now allows borrowers to consolidate their student loans with any lender. This
means that you can consolidate your eligible loans with Citibank and receive our
industry-leading benefits and services.
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