Many people are calling me to consolidate my loans every day. Why are these people calling? What are the benefits to consolidating
2007-01-03 03:33:37 · 4 answers · asked by James R 1 in Education & Reference ➔ Financial Aid
Consolidating your student loan can be a good idea, because it allows you to combine all your loans so you get one bill, and can extend your repayment term (up to 30 yrs, depending on how much you owe). Extended repayment gives you the cushion of lower monthly payments, but it means that you will end up paying more interest over the life of the loan, if you pay just the minimum each month.
Interest rates on federal consolidation loans are set by the government, so different lenders offer different "benefits". Be careful whom you consolidate with, as lots of shady characters have entered this market recently - that explains why so many people are calling. It's a lucrative market for those who get you to consolidate and then "flip" your loan by selling it immediately to someone else.
Many lenders offer interest-rate reductions for paying on time or via direct debit. It is important to read the fine print and understand how you become qualified for or disqualified for a lender’s borrower benefits programs. Beyond savings, borrowers should consider customer service, flexible repayment options, online account access and applications, reputation and industry experience when selecting a lender.
http://www.salliemae.com/after_graduation/manage_your_loans/consolidate_student_loans/student_loan_consolidation.htm
2007-01-03 07:22:56 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Lower interest rates but over a longer period of time
2007-01-03 11:35:53 · answer #2 · answered by fancyname 6 · 0⤊ 0⤋
lower monthly bills but for extra number of years
2007-01-03 11:44:18 · answer #3 · answered by Anonymous · 0⤊ 0⤋
i dunno..they're wacko...lol
2007-01-03 11:42:34 · answer #4 · answered by Re 4 · 0⤊ 0⤋