Frequently Asked Questions
BENEFITS
How does student loan consolidation work?
Consolidation gives you the opportunity to reduce the amount you pay each month on your student loans by extending the repayment terms - up to 30 years for both federal and private student loans. As a result, the amount you pay each month goes down, giving you more financial breathing room.
What are the key benefits of consolidation?
You can lower your monthly payments by up to 50% or more and also save hundreds – maybe even thousands – on your student loans through Fundamental’s benefit options. What's more, you can make only one convenient payment (although we recommend consolidating you federal and private loans separately if you have both) instead of keeping track of multiple lenders, loan amounts and due dates. And in the case of federal consolidation loans you can lock-in a fixed interest rate that will not change even if rate do.
GENERAL
How many loans may I consolidate?
There is no limit to the number of eligible loans – or the total balance amount – that you may consolidate.
I’ve already consolidated my federal student loans. Can I consolidate again?
You can apply for a new student consolidation loan only if you have at least one eligible federal student loan that was not included in your original consolidation loan.
What type of information will I need to consolidate?
For federal loan consolidation, all you need to – including name, date of birth, address, phone, e-mail, and Social Security Number. Fundamental will do all the tedious work for you, assembling your relevant loan information, assisting you in completing your application, getting the disbursement process started, and providing you with regular updates on status during the disbursement process.
For private loan consolidation, you will need to provide information similar to what is required for federal loan consolidation plus
additional documentation including verification of income and the school from which you graduated. A credit check will also be required
of you or your co-signer if you have one. We can provide you more details on specific information that will be required for a private
consolidation loan when we speak with you and understand your individual situation better.
When is the right time to apply for consolidation?
You may apply for a federal consolidation loan with Fundamental up to two months before graduation, during the grace period immediately following graduation or anytime your federal student loans are in repayment. Also, if you are no longer enrolled in school full time, you may consolidate anytime you wish.
Once your federal consolidation application is completed, the disbursement process usually takes 6-8 weeks, so it certainly makes sense to apply up to two months before leaving school.
You can apply for a private consolidation loan anytime you wish, but recommend that you do so once your last private loan has been disbursed so that you are able to combine all of your private loans into a single private consolidation loan.
I’m planning on attending graduate school. Should I consolidate now?
Our answer is yes for your federal loans. Federal consolidation offers you the opportunity to combine all of your undergraduate loans into a single loan, lock in a low fixed interest rate and still preserve the ability to defer your consolidation loan payments upon matriculation into graduate school, just like you do with your current loans.
For private loan consolidation our answer is also frequently yes, but we would prefer to understand your individual situation in more
detail before we provide you our recommendation. It typically only takes a brief conversation with you for us to provide you our
considered advice on this topic.
How long will it take to consolidate my loans?
Fundamental strives to provide the fastest turnaround times for federal consolidation in the industry. You can start application online application in just two or three minutes and we’ll get back to you right away. After a brief phone conversation – which usually takes 15 minutes or less – your loan application can be complete. It’s THAT easy!
Fundamental also seeks to provide the fastest possible timeline for completing private consolidation loans. For private consolidation loans we are frequently able to let you know if you will be eligible during our first conversation. Since private consolidation loans do require that you or your co-signer provide required documentation to confirm your eligibility, the time line is frequently determined by how fast you are able to provide this information. If you provide this information promptly and are confirmed as eligible, we will be able to complete your private consolidation loan in as little as 2 weeks.
Must I continue to make loan payments while my consolidation application is in process?
Yes. You should make your student loan repayments on the regular schedule until your consolidation has been disbursed. If your current loans become delinquent or go into default, your consolidation loan will be delayed. Once disbursement is complete, we will send you a new repayment schedule, with your new reduced monthly payment and due date.
ELIGIBILITY
Am I eligible for student loan consolidation?
If your student loans are in grace, repayment, or in a deferment/forbearance, you may be eligible. Ask yourself: Have I already graduated or will my studies be completed in the next few months? Do I have multiple student loans? Our friendly and knowledgeable Loan Consultants can let you know quickly whether you meet eligibility requirements – usually within the first minute or two of speaking with you.
Do I need to be employed or have a co-signer?
For federal student loan consolidation the answer is no. You do not need to be employed to consolidate your loans, you do not need to have any form of collateral, and you do not need a co-signer of any kind.
For private student loan consolidation the answer is probably yes. While employment or a co-signer are not automatically required for you to be eligible for a private consolidation loan, most borrowers do need to be employed or have a co-signer - often times both. We can let you know all of the requirements for a private consolidation loan once we understand more about you individual situation and if you do, in fact, need a co-signer we will provide you and they both guidance on how to best qualify.
Because federal student loans are guaranteed by the U.S. government, no credit check is required for a federal consolidation loan. However, consolidation will likely improve your credit rating by reducing the number of open lines of credit you have outstanding. For private consolidation loans the answer is yes - for both you and your co-signer if you have one.
What types of loans may be consolidated?
- Stafford Loans – Subsidized and Unsubsidized
- William D. Ford Direct Loans – Subsidized and Unsubsidized
- Federal Direct Stafford Loans – Subsidized and Unsubsidized
- Parent Loans For Undergraduate Students (PLUS)
- Direct Parents Loans for Undergraduate Students (PLUS)
- Federal Direct Consolidation Loans
- Guaranteed Student Loans (GSL)
- Graduate PLUS loans
- Federal Perkins Loans (NDSL)
- Health Professions Loans For Students (HPSL)
- Loans for Disadvantaged Students (LDS)
- Nursing School Loans (NSL)
- Private education loans and more…
How about my private loans? May I consolidate them, too?
The answer is yes, but it probably makes sense to consolidate your private loans but not to combine them with your federal student loans. The primary reason is that federal consolidation loans
are guaranteed by the federal government and as a result are almost always less expensive than private loan consolidation options.
In addition, federal regulations do not permit non-federal loans to be included in a federal consolidation loan.
It’s is almost always in your financial best interest to consolidate your federal student loans first and separate from your private loans. You can reduce your number of open lines of credits and obtain better terms by combining your federal student loans into a federal student consolidation loan and then combining your private student loans into a separate private consolidation loan.
Is it possible to add in my outstanding credit card and car loans balances?
Unfortunately not. The reason is that federal student loans are supported by the U.S. government, which permits only eligible federal student loans to be combined into a federal consolidation loan. Private loans must also be educational loans to be included in a
private consolidation loan.
Can my spouse and I consolidate our loans together?
Sorry. Due to a federal regulation change in July 2006, a married couple may not obtain a federal consolidation loan as joint borrowers. While it is possible for you spouse to be a co-signer on your private consolidation loan, they must meet the required eligibility requirements to do so. We can advise you better on your spousal inquiries with regard to private loan consolidation when we understand your individual situation better.
SAVINGS
What is the interest rate for consolidation loans?
For federal consolidation loans, the rate will be a fixed rate equal to a weighted average of the interest rates on your existing federal student loans rounded up to the nearest one-eighth of one percent. Unlike variable rates, they are locked in for the duration of the loan. And remember, these rates are starting points, and do not represent the final, lower rates you may receive through benefits offered by Fundamental including reductions for electing automatic payment and on-time payments.
For private consolidation loans, the rate will be variable and will depend on your credit profile and/or the credit profile of your co-signer if one is required. Generally speaking, interest rates on private consolidation loans are lower for borrowers that have better credit profiles.
How much will I be able to save each month?
Every situation is different. You can obtain an estimate for federal loan consolidation by using our
saving calculator. You can obtain a more precise estimate for both your federal and private consolidation loans by speaking with one of our friendly
and knowleagble Loan Consultants.
How can I get the lowest student loan payments you offer today?
Whether it is federal or private loan consolidation, the way to lower your monthly payments as much as possible is to extend the repayment
term of your loan to maximum period permitted. We can tell you exactly what that maximum repayment term can be once we have your loan
balance.
It is important to remember, however, that by extending your repayment term you are typically going to pay more interest over the life of your loan.
This said, with both of our federal and private consolidation loan products we DO NOT charge any pre-payment penalities. This means that you, if
you are able and feel comfortable, repay the entire balance of your loan at any time at no additional cost.
Why consolidate during my grace period?
For the first six months after graduation – or after leaving school full-time – your federal student loans are in a grace period, which means that while they accrue interest, no payments are required to be made. During the grace period, the interest rate is 0.60% lower than the interest rate that becomes applicable once the loans are in repayment. That’s substantial – and you can lock in this lower rate forever by consolidating during the grace period.
COSTS AND REPAYMENT
How much will consolidating my loans cost?
For a federal consolidation loan not a thing. There are no loan application fees, no prepayment penalties, and no credit checks. This is a free service for graduating students, parent borrowers and students leaving full-time enrollment in school for other reasons.
For private consolidation loans we also offer a no fee option to qualified borrowers. Speak with one of our Loan Consultants and we will be able to
let you know if you can qualifiy for a no fee private consolidation loan and if not, how much the fees would be for you - and options that may be
available to you to reduce them.
Do your consolidation loans offer different repayment options?
Yes. Fundamental's federal consolidation loans offer you four (4) different repayment options.
Equal Payments – This option provides equal monthly payments over the term of your loan. The repayment terms and loan balance thresholds offered by Fundamental are summarized in the table below:
| Loan Balance | Maximum Repayment Term |
| $10,000 to $19,999 | 15 years |
| $20,000 to $39,999 | 20 years |
| $40,000 to $59,999 | 25 years |
| $60,000 or greater | 30 years |
Select 2 / Graduated Payments – This option allows for interest only payments during the first two years of repayment. In the third year, payments increase to a higher amount that remains fixed for the remaining term of the loan. The repayment term options and loan balance thresholds are the same as for the Equal Payments above.
Select 5 / Graduated Payments – This option allows interest only payments during the first two years of repayment. In the third through fifth years, payments increase to a higher amount that reflects some portion of principal repayment. In the sixth year, payments increase once again to an even higher amount that remains fixed for the remaining term of the loan. The repayment term options and loan balance thresholds are the same as for the Equal Payments above.
Income Sensitive Payments – This option provides for payments to be adjusted annually based on your expected total monthly gross income from employment and all other sources. If you select this option you must be approved by the servicer of your loan and will be required to provide that servicer certain information that verifies your projected income estimates in order to obtain approval. Additionally, you will be required to provide updated income verification information periodically to your servicer to remain eligible for this repayment option.
Fundamental also offers flexible repayment options for private consolidation loans. Please speak with one of our friendly and knowledgeable Loan Consultants for complete details.
How does loan consolidation affect my overall repayment amount?
Extending your repayment period does increase total interest payments, since smaller payments are made over a longer period of time. However, there are no prepayment penalties, so you could pay off your loan more quickly and save on total interest payments.
May I pay more than the minimum loan payment each month?
You may prepay all or any portion of your loan at any time without penalty. Any overpayment is applied to the principal loan balance and does not affect the monthly payment amount until the loan balance is zero.
When will I have to make my first payment?
Usually, your first payment is due within 45 days after your consolidation loan has been disbursed. You will receive a repayment disclosure that will let you know your due date.
DEFERMENT AND FORBEARANCE
What if I need to defer my student consolidation loan?
You may defer if you meet eligibility requirements including education reasons, unemployment, economic hardships or Peace Corps service.
Can I still get a forbearance if necessary?
Yes for federal consolidation loans. You may also forebear your consolidation loan for up to 36 months without losing the borrower benefits described in your original Stafford, PLUS, and SLS loan promissory notes.
Yes also for private consolidation loans, although forbearances are only granted for up to 12 months - in 6 month increments - and with lender approval. It is also worth noting that the standards for obtaining forbearance on a private consolidation loan are generally higher which typically means it is more difficult to obtain than forbearance of federal consolidation loans.
SECURITY
Why do you request my Social Security number?
It is standard procedure to request your Social Security number during the student loan consolidation application process. Your Social Security number will be used by Fundamental only to verify your student loan information with the Department of Education and to process your Consolidation Loan application. Please view our Privacy Policy to learn more about how we protect your personal information.
It’s an easy way for you to complete your consolidation loan application online without tedious paperwork. Fundamental allows you to self-authenticate online, using a hidden password only accessible to you. An E-Signature replaces the need for you to physically sign your application but carries with it the same responsibility to repay the loan in a timely manner.
Are there benefits to E-Signing my application?
By E-Signing, you can complete your application online. As a result, the time to fund your loan is significantly reduced.
How safe and secure is it to E-Sign?
We follow the strictest industry guidelines and protect your signature with market-leading firewall technology and industry-standard SSL encryption. You can rest easy.
