Direct Consolidation Loan combine two or more federal loans in just one federal loan.
 
 Advantages:

 
 - The interest rate is low and fixed for the whole loan repayment period.
 
 - The consolidation process is not charged.
 
 - The interest rate will be even lower if consolidation happens while you’re still studying or in grace period.
 
 - The interest rate is calculated on the pondered average of the current loans’ rates.
 
 - Combination of various loans in one single loan.
 
 Repayment options:
 
 - Standard. Every month you pay the same amount, which was fixed at the time of loan consolidation.
 
 - Two-year gradual. On the first two years you repay interest and from the third year onwards you pay capital plus interest.
 
 - Five-year gradual: On the first two years you repay interest, then a combination of interest and a little part of the capital, and from the sixth year onwards you repay capital and interest.
 
 - Repayment is based on your yearly income and thus you need to produce a copy of your IRS tax statement every year.