Alternative Consolidation Loan
Dakota Education Alternative Loan (DEAL) Consolidation
This loan allows a borrower with an existing DEAL loan to consolidate non-federal alternative education loans for:
- one easy payment,
- choice of a fixed or variable interest rate, and
- may extend the repayment term.
Who is eligible?
A borrower who is no longer in school and has at least one DEAL loan is eligible to consolidate his or her existing DEAL and non-DEAL alternative education loans.
What is the interest rate?
You must choose between a fixed or variable interest rate. Interest accrues on the unpaid principal balance of the loan from the date of disbursement until the entire principal balance is paid in full. View current interest rates.
If you choose a fixed rate - the interest rate will be set on the day the loan is approved and remains the same until the loan is paid in full. The fixed rate is set based upon the type of underlying loans you plan to consolidate and, in some cases, the interest rate currently assigned to those loans. Refer to the table below for additional information on underlying loan types and how the DEAL Consolidation rate will be set.
Underlying Loan Types and DEAL Consolidation Interest Rate Method
Loan Type |
DEAL Consolidation Interest Rate Method |
DEAL loans at a fixed rate |
If all underlying DEAL loans are at a fixed rate, BND uses the weighted average interest rate of all underlying loans to calculate the new fixed interest rate. This new rate is rounded up to the nearest 1/8 of 1% unless the rate is already a multiple of 1/8 of 1%. |
DEAL loans at a variable rate |
If all underlying DEAL loans are at a variable rate, BND uses the fixed rate in effect on the date your Consolidation application is approved to calculate the new fixed interest rate. This new rate is rounded up to the nearest 1/8 of 1% unless the rate is already a multiple of 1/8 of 1%. |
DEAL loans at both fixed and variable rates |
If the rates of your DEAL loans being consolidated are fixed and variable, BND calculates the interest rate by converting the variable loans to the fixed rate in effect on the date the Consolidation application is approved. The fixed rate DEAL loans will use the interest rate that is currently assigned. Finally, BND calculates the weighted average interest rate by using the recalculated rates above rounded up to the nearest 1/8 of 1%, unless the rate is already a multiple of 1/8 of 1%. |
| All non-DEAL private loans |
Non-DEAL alternative education loans will be assigned the fixed rate in effect on the date your Consolidation application is approved. This rate will be used along with the rate(s) of your DEAL loans as described above to calculate the weighted average interest rate rounded up to the nearest 1/8 of 1% unless the rate is already a multiple of 1/8 of 1%. |
If you choose a variable rate - all of the loans being consolidated (both DEAL and non-DEAL alternative education loans) will use the variable rate that is in effect on the date the Consolidation application is approved. The interest rate will change as interest rates decrease or increase throughout the life of the loan.
Are there any fees?
A 2% fee will be charged on any non-DEAL alternative education loans that are included in a DEAL Consolidation loan. The fee will be calculated on the payoff and added to the principal balance of your loan.
Do I need a cosigner?
A cosigner is required if any of the DEAL loans included in the consolidation have a cosigner. You can use the existing cosigner or provide a new creditworthy cosigner who is at least 18 year of age and a U.S. citizen.
If you do not have a cosigner on any of the DEAL loans included in the consolidation and you are increasing the amount of debt by including other non-DEAL alternative education loans, you must re-establish creditworthiness.
A cosigner release option is available after 24 on-time payments. To qualify, the borrower must be creditworthy, in repayment on the loan(s), and have made 24 consecutive on-time regular payments.
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Download the DEAL Cosigner Release Form.
When does repayment begin?
The loan enters repayment upon disbursement of the loan.
How long do I have to repay?
The repayment term for each loan may be up to 25 years depending on the loan balance.
How do I apply?
You can download and print the following forms to apply for the DEAL Consolidation loan or you can call 1-800-472-2166 ext. 5763 and request the forms be mailed to you.
Borrowers:
Cosigners:
