has anyone consolidated student loans? any advice on who to go with? any bad experiences?

Answer 1

I generally recommend that my students consolidate with Sallie Mae. They hold the most consolidation loans out there (they're several billion dollars ahead of the #2 lender Citibank) and have been in business for a long time. Technologically, they're unparalleled (a good lender website really comes in handy if you tend to forget your payment due-date -- if it's due in an hour and you can't pay online, you're in a bit of trouble). (Their call center is huge, too.) I've dealt with a lot of students who have consolidated through Sallie Mae (including some students who completed the slightly-more-complicated "in-school consolidation" process) and each time it went smoothly.

Quite frankly, you don't always have a choice as to who you consolidate with. If all your loans are held by the same company, you must consolidate with that company (it's called the "single holder rule"). I, personally, was bound by this rule. Though I definitely don't tell my students this (given my pro-Sallie Mae stance), I myself had to consolidate with Citibank. To be honest, everything has gone well. They completed the consolidation process quickly and their website allows me to pay online, view my tax info online, and update my address online -- these are all good things to look for. Of course, it's possible that if I had had non-Citibank loans, the process would have taken longer... But that's why you should ask questions.

As far as bad experiences... I can think of one student (who was also bound by the single-holder rule) who had to consolidate with a smaller lender... His application was completed in full, online and it took *forever.* Not only was this inconvenient, but it also caused him to lose out on the lower, in-grace interest rate. Lesson learned: always ask your consolidation lender how long the process will take and plan accordingly.

People who have bad experiences generally have them because (a) they didn't read the instructions and (b) didn't seek professional advice when they had questions. Asking questions doesn't cost you money, but *not* asking them can (as with the case above). Even students who consolidate with top-notch lenders can still have problems. A few words of advice:

* Don't leave things blank on your application. Sometimes you can get away with writing "N/A" but other times you must put something. Don't assume that your lender will call to remind you to complete your application -- especially when time is of the essence (e.g. like now if you want to consolidate before the July 1st rate hike)

* Know the terms of your loan before you apply -- when the consolidation loan is disbursed, it'll be too late to change your mind (and that won't be the lender's fault)

* Before you apply, make sure you know how many loans you have, who your lenders are for those loans, and whether those loans are consolidatable; you can't expect your consolidation lender to always know this information, especially if you've had loans from multiple sources. I've had students come to me, 6 months after consolidating, and tell me that they forgot to include one of their loans into the consolidation. Sometimes, they'll realize this in time; other times, it'll be too late to add in the "forgotten" loan.

EDIT: Effective today, Bush signed the Emergeny Spending Bill, which repealed the Single Holder Rule. You're free, now, to borrow with whichever lender you wish to.

Answer 2

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RE Has anyone consolidated student loans? any advice on who to go with? any bad experiences?

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