How PLUS Loan Consolidation Works

We understand that the PLUS Loan consolidation process can be a confusing one. Here's a walkthrough that will help you understand how it works, and why consolidating now will work for you for years to come.

Apply

The first step in the consolidation process is to fill out a loan consolidation promissory note. You can do this online or you can request a paper application be sent to you in the mail.

Sign and Mail

Once you submit your application online, or mail it in, you will receive information on terms and rates in the mail 2-4 weeks later. If you are in agreement with the terms, the consolidation will be finalized over the next 2-4 weeks. If you are not in agreement with the terms you would mark that on the paper work and mail it back to the address given right away. This will stop your consolidation from being finalized.

Payoff Statements

After your application has been checked for accuracy, payoff statements (called loan verification certificates, or LVCs, in the student loan industry) are requested from your existing loan holders. These statements report exactly how much you owe. Some payoff statements take up to 60 days to get back. It is very important, if you are currently making payments, to continue making payments on your existing loans until you receive your new payment information in the mail.

New Loan

Once you receive your new payment information in the mail, you now have a new consolidated loan, in replace of your previous loans. As a precaution you should always follow up with your previous lenders to make sure your balance has been paid in full. You should allow at least 2 weeks from when you receive paperwork regarding you new loan, before you verify with your previous lenders that your accounts have been paid in full.

Payoff

Your loan proceeds from your new federal consolidation will be used to pay off each of your existing loan holders. Your existing loans are paid in full. This is why consolidation is a smart idea for your credit rating - it shows that you have successfully paid off all your existing PLUS Loans, which reduces the number of loans you owe, and shows you successfully paid off a series of debts, both of which increase your credit score.

Request Free Consolidation Information