Consolidating Student Loans?
Feb 10
Student Loans Q&A interest rate, sallie mae 2 Comments
I am trying to figure out who to consolidate with. I heard Sallie Mae is a rip off. Is this true? Also what interest rate should I be looking for?
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Feb 10, 2010 @ 19:09:09
Most companies will offer the same interest rate – it is the weighted average of your current student loans.
Just about all student loan companies offer consolidation, including Sallie Mae. I work for a competitor of them but to remain fair will not name who. Sallie Mae is no better and no worse than anyone else, but they are a very large student loan corporation (the 800 pound gorilla in the industry).
When shopping for a consolidation loan, look for a reputable company – someone you have heard of – a bank, Sallie Mae, etc. All these companies offer the same base rates but offer different incentives for on-time payments such as a reduced loan balance or a reduced interest rate. Some companies make it more difficult to achieve these benefits than others.
I always recommend that students and borrowers check out different school’s financial aid offices websites – not just your own. See who the schools are recommending. If you consistently see the same couple of names start there.
Stay away from the fly-by-night, spam based companies. You’ll be sure to get tons of offers from them, including a few here on Yahoo answers I’m sure.
Good luck!
Feb 10, 2010 @ 19:09:09
By law, lenders are required to use the same interest rate formula for consolidation loans, so Sallie Mae is in the same boat as everyone else. However, 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, you should consider customer service, flexible repayment options, online account access and applications, reputation and industry experience when selecting a lender.