There are many kinds of federal loans that are eligible for federal loan consolidation. The only kinds of loans that are not eligible are privately-funded loans. Other than this, a person with a more or less stable financial disposition can be easily consolidated within one or two months of application.



Backtrack - America's in Debt

According to the FTC:

“Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?”

“You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse.”

As the FTC stated, having debt doesn't have to be the end of the world. Consolidation, including federal loan consolidation gives a person a chance for financial security- if the repayment is done well.

Eligible Agricultural Loans

These loans are eligible for federal loan consolidation:

1. Farm loans - operating loans are bestowed by FSA or the Farm Service Agency. These loans are bestowed to farmers that are unable to acquire necessary credit to continue their livelihood.

2. Commodity marketing loans - when commodity crops are having a hard time, this loan can be used to bolster production and sales.

3. Ownership loans - ownership loans are bestowed to farmers that cannot acquire credit from the Farm Credit System and similar entities due to unforeseen disasters and economic difficulties.

4. Farm storage loans - as the name implies, these loans can be used for the construction of grain storage facilities.

Eligible Business Loans

The following are also eligible for federal loan consolidation:

1. Small business loans - can be traced back to sec. 7 of the SBA or Small Business Act.

2. Disaster loans - if a small business or an entrepreneurial outfit has experienced economic harm in an area that has been declared an area of disaster, this loan is bestowed. The assistance comes from the Small Business Administration.

3. Indian loans - American Indians can apply for this loan if they are having a difficult time acquiring any form of commercial credit. This allows members of the American Indian community to engage in small businesses without being redlined by private lenders.

4. Microloans - start-ups and other very small businesses can be started with microloans.

5. Physical disaster loans - similar to disaster loans, these loans are given to businesspeople who have had experienced structural damage in disaster areas.

Managing Debt

According to Ernst Derek, a CPA and credit counselor from Minnesota:

“The development of a good budget plan is always the first step to debt management. It has nothing to do with how smart a person is or otherwise. It's about knowing exactly how much you can afford on a monthly basis. Consumers should never be afraid to face the real state of their financial affairs.”

Derek continues with:

“Creditors and loan holders should also be your allies. They're not really enemies. They just want you to repay the debt, it's that simple.”