how do u consolidate student loans?
I just graduated college a few months ago but now i have like 8 different loan payments is there a way to combine them into one loan? and how do i go about doing that?
I just graduated college a few months ago but now i have like 8 different loan payments is there a way to combine them into one loan? and how do i go about doing that?
This entry was posted on Friday, February 5th, 2010 at 11:55 pm and is filed under Student loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
If you have federal loans you can use Direct Loans (direct from the government) to consolidate them. If you have private student loans then you will need to see if you can consolidate with your lender. If you have a combonation of federal and private you can only consolidate all of youe federal loans together with direct loans. Below is the link for a direct consolidation loan.
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I just consolidated my students loans. Here is how to do it.
Consolidating your federal loans means you will pay one monthly bill and will determine a fixed rate for the life of your loan. This rate is generally lower than that of a private consolidation offer.
To determine your consolidation rate for your federal loans, a lender will calculate a weighted average of your current loan rates and then round up to the nearest 1/8, but not to exceed 8.25%. Calculate your potential consolidation rates using FinAid’s consolidation calculator.
Your interest rate also depends on the type of federal loans you have and when you took them out.
You can lock in a lower consolidation rate by consolidating during your grace period (the several months immediately after graduation, during which most lenders will not force you into repayment). Consolidating during your grace period, while ultimately helpful because your interest rate is lower, does force you into immediate repayment, even if you still had a few months left before scheduled payments were to begin.
Because Stafford loan holders who graduated in 2007 or after will pay fixed rate interest, it’s not as clear that they should consolidate as it has been in the past.
Note you cannot consolidate loans if you are currently in school.
It is not recommended that borrowers consolidate federal loans into a private loan because you will lose important privileges to defer, apply for a forbearance, or qualify for loan forgiveness under government programs. And under no circumstances should you pay a fee to consolidate your federal loans
If you would like to consolidate your private student loans, you should turn to either Chase, NextStudent, Student Loan Network or Wells Fargo ( WFC - news - people ), Kantrowitz suggests. All offer slightly differing terms, and all have caps on the amount of total debt you can consolidate.
Important questions to ask a consolidator are whether it charges origination fees, if there are prepayment penalties, what the maximum interest rate is and what the life of the loan will be. Read the terms carefully, and if possible, have a friend or relative do the same. If you don’t understand something, ask the lender until you get a straight answer. After all, you’re entering into a contract that can last as long as 30 years.
Steer clear of any lender that charges a prepayment fee. You’ll want the option to pay off the loan early without being penalized for it.