Consolidating student loans?

Consolidation means you pay off all your current student loans and get a single new student loan for the total amount of your previous loans. Most students consolidate for one of two reasons:

1. To reduce the amount they must pay each month by extending their repayment term (up to 30 yrs depending on how much you owe).

2. To get the convenience of one monthly bill instead of lots of bills for each individual loan.

Depending on the interest rates of your student loans, there may or may not be a benefit to consolidating. Best thing to do is call your current lender and ask, or use the calculator at http://www.salliemae.com/consolidation to do the calculations yourself.

If you decide to consolidate – stick with a large, reputable firm. By law, all federal consolidators must use the same interest rate formula, so they compete on things like interest rate reductions for direct deposit or paying your loan on time for a certain amount of months. Don’t fall prey to some of the smaller fly-by-night consolidation companies that are just preying on students.

Lastly, if you consolidate and extend your repayment term, remember that if you pay just the minimum each month, you’ll end up paying more interest over the life of the loan (just like a credit card or mortgage.) So as soon as you can afford to, pay more than the minimum.

Good luck!

Well, federal student loan consolidation, in most cases, is a good idea. When you consolidate, your payments are reduced by approximately 50%, because of a longer repayment term. If you can afford your payments now this is great. There are no pre-payment penalties with federal student loan consolidation. So, if you continue to pay the amount you pay now, you will pay off your loan years before you would have even with out consolidating. Let’s say you pay $400 now, you consolidate its cut to $200, but you continue to pay the $400, with no pre-payment penalty the extra $200 goes directly to principle. It’s like with out consolidation $395 goes to interest $5 goes to principle, with consolidation $195 goes to interest $205 goes to principle.

The reductions that are out there are nice as well, .25% auto-withdrawal, 1% after 36 on-time payments, great right. Yes and no. Some of your more established companies out there have found ways around that. Let’s say you make 33-34 payments, now your lender sells your loans, bye-bye 1%. Less than 5% of people who consolidate with a lot of companies actually receive the reduction. There are companies out there that are better, but not many, attached is a neutral website with a little more information on this.

The cash rebates are one of two things, a loan that accrues interest, or based upon first payment, you have 60 days to receive, but the consolidation actually takes 61 days.

Don’t get me wrong consolidation is usually good, but without anymore information that is the best explanation I can give.

Good Luck.

Feel free to contact me (866)942-9199 ext 223, my name is Chris Black

What it means to consolidate, is to take all of your student loans and put them in one lump sum payment. instead of making numerous payments to one lender or different lenders. The other positive is that it extends the time you have to pay the loan from normal 10 years to about 25 years, which does lower your payments, but end up paying more interest in the long run.

I consolidate and it was the best thing I did concerning my loans, makes life a whole lot easier.

You really need to be careful with all of these companys that send you notices, alot of them are marketing companies, who are trying to get business for the client. I would suggest going through your lender for consolidation.

I hope this helps. if you have any additions questions feel free to e-mail me at [email protected]

Consolidating your loans will save you a ton of money each month, so it’s definitely something you want to do. If you’re getting a ton of mail, give some of the companies a call to see what they can offer. I consolidated my loans recently and ended up getting cash back. The number to the company I used is 877-490-6635. Good luck!