How Do I Qualify for a Government Debt Consolidation Loan?

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  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 16 August 2019
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To qualify for a government debt consolidation loan, you will typically have to meet the criteria of the lending program in question. Usually, these programs are offered for students who have more than one loan and want to make repayment easier. You can likely qualify if you are not in default or delinquent on your payments. Depending on where you are located and the type of loan in question, you may not have to submit to a credit check as you would if you were hoping to consolidate other types of loans. In fact, when participating in a government debt consolidation program for student loans, you may not even need a job to qualify.

Typically, you’ll need outstanding government loans to qualify for a consolidation loan. This means that, if you received a loan from a private institution and it was not backed by a government guarantee, it is unlikely that you will qualify. If you have two or more government-granted or -backed loans that are eligible for a loan consolidation program, however, you may qualify to consolidate your debts.


The first step in qualifying for a government debt consolidation loan is usually learning the criteria of the program in which you are interested. In many jurisdictions, the only type of debt consolidation program available is for people who have student loans. In such a case, qualifying is often very easy. For example, government debt consolidation for student loans is often available without regard to credit history or current income. Likewise, you will not typically need any collateral or a cosigner.

While your credit history and employment status may not figure in your ability to secure a loan, there is one factor that usually proves critical: payment history. Typically, you will be turned down for this type of loan if you are delinquent on your payments or in default on any of your government-granted or -backed loans. Often, however, government student loan programs have measures in place to allow you to catch up on payments and get out of default status. Once you’ve done so, you can typically apply for and receive a consolidation loan.

The timing of your application may also prove important. Consolidation programs usually have rules for when you can apply. For example, a student loan consolidation program may require you to have graduated from your educational program or be enrolled with less than half-time status.


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Post 3

Be as persistent as you can with this kind of thing and always check the fine print. They want to give you this consolidation loan, remember. Most of the people working at this government office are there because they want to help people. And it's no skin off their nose to consolidate your debt.

But you have to make it as easy for them as possible, so fill out every form you need to as clearly as possible, and be polite.

Post 2

@fa5t3r - If I was at the point where I even needed to consider getting personal loans for debt consolidation, I would go to get some financial advice before signing up for anything. There are plenty of places that offer financial advice for free in big cities, and if you don't live in a big city, there are often places online that will help you out.

Make sure it's not a company in disguise, but a genuine organization set up to help people get out of debt and then tell them all your problems, so that you can find a way out. Debt consolidation is sometimes the answer, but not always and often the way through is more complicated than you might realize (or even simpler than you hoped).

Post 1

Remember, the government isn't the only one who offers low interest debt consolidation loans. I'm not usually one to encourage people to look at signing up with this kind of company, and you do have to bear in mind that they are trying to make money off you, but if your other debt has high interest it's worth considering it.

These companies will basically buy all your debt so they can get the interest, but will offer the debt to you at a lower interest rate. This is particularly true if they are getting your debt off credit cards, since credit card interest rates are often extremely high.

So, if you don't qualify for government debt consolidation it's worth looking into this instead. But do your research and stay cynical about it, so that you don't end up in a worse mess.

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