Should I consolidate my student Loans?

Question

I have jsut graduated and have over $60,000 in college loan debt.. I have aroung 9-10 different lenders.. Should i just keep things the way they are or should i consolidate my loans? I havent started making payments yet...

Answer 1

Hello Melissa,

As the other responders have said, YES, it makes complete sense fo ryou to consolidate!

Especially being that you have such a large amount of student loan debt...

The government offers this program to students as a way to teach people a more effective way to manage your debt.. By combining all of the loans into one loan it simplifies your finances..

Think about it, at the end of each month, do you wan tto be sending a9-10 seperate payments to 9-10 seperate lenders, or do you wnat to make one payemtn to one lender???

Imagine the checks, stamps, and envelopes you would use in just 1 year if you stayed the way you are..

Not only that but look at the more important issue..

All loans taken out before July 1st 2006 are variable rates.. In the last few years interest rates have been on the rise... If you dont consolidate into a fixed rate, your rates will rise on all of your loans..

THIS MEANS YOUR PAYEMTNS RISE AS WELL!!!

By consolidating you get what is called a weighted average interest rate.. The take an average of your interest rate based on the amount of each loan... More importantly the interest rate is FIXED on the new consolidation loan..

So, it make s complete sense to consolidate your student loans!!

Remember, the government offers this program FREE OF CHARGE!!!!

My name is Jason Fry, i am a financial advisor for Student Aid Lending.. We are licensed nationwide and are a title IV lender administered by the Department of Education..

Take a look at my personal yahoo 360 page.. You can find alot of helpful information as well as a direct link to our website...

http://360.yahoo.com/my_profile-HlUDUhMib7M9Wlj6o6L2SfGcEYtkt9xsaQ--?cq=1

Feel free to call or email me at any time with questions, or curiousities..

I will take time to answer any and all questions!!

Good Luck!

Jason Fry
Student Aid Lending
1-800-964-0642 ext. 114
[e-mail]

Answer 2

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Answer 3

It is usually a good idea to consolidate for a couple reasons:

1.Typcially you get a better interest rate (weighted average of the interest rates of your existing loans),
2. You get just one bill, which makes things easier to manage and reduces the risk of missing one
3. You can extend your repayment terms up to 30 yrs, which gives you the cushion of lower monthly payments. (It's still a good idea not to actually take 30 yrs to pay, cause if you do you'll end up paying more interest over the life of the loan).

Be careful whom you consolidate with. Lots of aggressive marketers are out there, trying to consolidate and then just sell your loan to a big company. It may be a good idea to stick with one of the lenders you already have, if you've been pleased with their service.

The above answerer was correct that you want to consolidate while in grace. Sallie Mae will hold your application (if you ask them) so you can still get the full benefits of grace, but still get the rate reduction of consolidating before repayment begins.

For federal loans, all lenders offer the same interest rate (it's decided by the government). They compete based on service and benefits.

Sallie Mae offers a lot of information on consolidation:
federal student loan consolidation http://www.salliemae.com/consolidation
private student loan consolidation: http://www.salliemae.com/consolidate

They also have an online calculator so you can see what your payments will be if you consolidate.

Good luck!

Answer 4

If you have several federal loans, you'll want to consolidate them into one loan for two good reasons


1) There is almost always a much lower intrest rate offered on the total loan amount when consolidated then when left seperate.

I had two Stafford Loans, each with a 7% interest rate or so, I consolidated and now all the money is being charged at only 5.3% This small difference could save you thousands in the long run, especially if you only make minimum payments (longer time for interest to accrue)

2) One bill/deduction to worry about a month instead of one for each loan. Less chance of forgetting a payment or being late.



You will want to make sure you consolidate only federal loans together through the government. If you have private loans, you can enter a discussion of consolidating them, but it's harder to get many private vendors to agree. You'll need to do some persistant question asking.

Do not forget that you can usually claim interest paid on federal loans as a deduction on your income tax. Take advantage!!!!!!

You really always want to consolidate federal loans when you have a chance, it will save you alot of aggravation later.


Special Note: YOU CAN CONSOLIDATE FEDERAL LOANS BEFORE PAYMENT BEGINS AND YOU WOULD WANT TO. Just wanted to make that clear due to the above post I just read.

Consolidation of federal loans before payment will save you headaches, trust me!

Answer 5

Consolidate!! It makes your life easier for one thing. You do have to waive your grace period in order to consolidate but you can request income sensitive payments that will be adjusted according to how much you make. You'll be saving yourself money on the interest too. They take an average of all your interest rates on your loans and most banks offer discounts for paying so many payments on time or for setting up automatic withdrawals.

Answer 6

You can't consolidate until you have begun to make payments on them. The easiest thing to do would be to consolidate once this process begins. That way you will have only 1 payment and interest rate. Check the interest rate on all of your loans. If a company offers you a higher rate that half of them, find another company. Just do your homework and consolidation should work out well.

Answer 7

Zarina is right, u definately want to consolidate your loans and do it before repayment starts. I attempted to consolidate once I was in repayment and it was a big mess. Consolidation gives you a much lower interest rate and lower monthly payments, so its definately the way to go.

Answer 8

Check out the articles on debt consolidation and debt relief at http://www.hammocksurvivalguide.com/
Some are written by people with experience. You should find some really useful advice there. Make sure you know what you are doing before you do it :)

Answer 9

Hey i'm here for the first time. I came across this question and I find the answers really valuable. I'm hoping to offer something back to the community and assist others too.

Answer 10

Mick Johnson and Cole Roberts posted the same question. You should see their answers side by side.