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Direct Loan Consolidation is sought after by those who are saddled with one or more student loans. Consolidating loans offers a host of benefits including reduced monthly instalments for a longer duration loan, renewed deference and flexible repayment options. 

It is possible for borrowers looking to consolidate their student loans that are in grace to consolidate various variable rate loans into a direct consolidation loan offering lower rate of interest. 

It must however be remembered that if your loan is under a grace period and you opt for Federal Loan Consolidation, then you will lose your remaining grace period. Sixty days from the day the loan is consolidated, borrowers receive their first bill. 

It is very important to keep in mind a few aspects before submitting the application for direct loan consolidation. 

Timing of application is very important. Rates of interest for loans that have been disbursed on or after July 1st 2006 are fixed. While in grace period, borrowers can consolidate their fixed interest rate loans. However doing this is not exactly beneficial as rates of interest for in-repayment and in-grace are the same. 

Direct consolidation loans are beneficial for loans in grace period that enjoy variable interest rates. This provides significant benefits in rate of interest. It is highly recommended for borrowers not to approach the direct loan servicing center for consolidation loan application very early in their grace periods as this may result in losing remaining grace period as the repayment actually begins only after sixty days after sanctioning of loan. The best time to apply for borrowers under grace period is after six months of grace in order to avoid forfeiture of a portion of the grace period. Keep in mind these facts as you apply for direct loan consolidation during grace period.