Key Facts That You Should Know About Government-Backed Debt Consolidation Loans

With the massive increase in percentage of Americans who fall into debt due to the overuse of credit cards, the US government has made an effort to come up with a plan to help their citizens free themselves from the financial messes they create. Having said this, there are quite a number of government-backed debt consolidation loans which are readily available to the public.With all the chatter that goes on about this government loan, not many are aware as to what it’s all about. The first thing you should know is that it is offered by the Federal Government in the United States for their people to settle debts in multiple accounts when they’re in really tight financial situations. Rather than invest in the services of a nonprofit debt consolidator which would cost a little, citizens can borrow a sum of money from the government at a very low interest rate to pay their creditors.The payment is done by converting the individual’s current debt from unsecured loan to a secured loan with collateral. As education has taken its place of being one of the most important necessities in our lives, the most popular loans are study debt consolidation loans meant to help students get through their universities and higher education. The US Education department also offers loans to help students pay off previous federal education loans. Under The Higher Education Act (HEA), two loan consolidation programs, i.e. the Federal Family Education Loan (FFEL) Programs and the Direct Loan Program are offered to provide financial assistance to those people who are in need.This government backed debt consolidation loan is the best thing out there for those who are looking for an economic hardship deferment, especially for those who are unemployed and don’t have a stable source of income. In addition to that, under the Federal Family Education Loan Program, individuals can take a loan in which they would not be tied to any bonds of having to use it for education purposes. But instead, it can be used to pay off any of your other pending debts.In a nutshell, there are many who’ve successfully used the loan to consolidate their financial troubles. Its trustworthy and worth the interest, so if you’ve got a debt or education on hold, get started on filling out the forms.

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