The loan which can lower your monthly payments with low and fixed interest rates is federal consolidation. This benefit along with some additional benefits like no credit check, no fees, and no penalties makes it the best option to choose. Such programs are framed to help the students, who want to study but do not have sufficient money to continue their education.What Does Loan Consolidation Do?Today, education is not a low-cost expenditure and this is the reason why many students depend on consolidation companies. These companies facilitate the learner with the cash amount at some discounted schemes, with which they can smoothly carry on their studies.Federal loan consolidation is a kind of financing program, which combines all your existing money and forms a single new loan. Such loans are provided at fixed interest rates to the student, which is valuated based on weighted average of the interest rates on the loans that are to be consolidated. Loan consolidation lowers your monthly payments by extending the period of loan from 10 years to 25-30 years.The borrowers are eligible to borrow once they leave school, have graduated or dropped below half time enrollment. In addition, if you possess more than one loan, then only you can think of applying for consolidation. The students who have borrowed amount while they were in the grace period of any loan that has been consolidated, it is to be noticed that that grace period gets terminated.Repayment PeriodThe repayment period begins within 60 days of the disbursement of the credit. Further, the period is dependent on the amount borrowed and the payment scheme chosen. The students choosing these programs are not required to pay any application fees or any prepayment penalties. With this benefit, they are also not asked for credit check.There can be situations when you are unable to make the monthly installment of the consolidated amount. Need not to worry in such a situation, just call consolidation company, and ask to put the amount into a deferment or Forbearance status, until the date when you are in a state of resuming the payment.It is to be noted that the consolidation cannot be done again and again, so choose when you really need it. It is recommended to do proper research and study before choosing and applying a plan for loan consolidation. Understanding the correct time and scheme of the loan can solve your financial needs and give you a bright future.