First off, for those that are not clear or need more information about consolidation such as eligibility, what types of loans can be consolidated, how are the interest rates calculated and more, head over to our previous article on “What is Student Loan Consolidation” for a detailed overview of the process.
There are dozens of reasons why you would want to consolidate all of your student loans. Some may simply want to have a single lender and a single payment allowing ease of tracking and payments. Others may want to take advantage of the flexible payment options some programs offer that others do not and still others may want to consolidate into a single lower monthly payment. We have covered in detail the many advantages to consolidating your student loan and the disadvantages of consolidation as well. Whatever your motivation, the following are three steps you need to take in order to consolidate your student loans.
The first thing you need to do is get prepared. You need to pull together all of your paperwork on your existing loans as well as information on amount due, interest rates, loan numbers, and loan servicer’s. You will then want to take that information and analyze all of the available student loan consolidation loans that are available. Do not assume that the first loan with a lower payment is the right one for you, there are many new types of loans including the very popular income based repayment plan. There are several consolidation calculators available online as well as countless guides to help you decide what type of loan you want to consolidate into. This is all part of the preparation stage for your consolidation loan.
The next step is you need to pull the application and all of the application instructions for your chosen loan. Be certain to review all of the requirements listed on the application more than one time and use a separate sheet of paper to make a checklist of all the items that need to be submitted with the application. Most applications these days are initiated and completed online and then you finalize the process by mailing a hard copy of the application along with supporting documentation to the lender, though it is may be useful to note that almost every lender that offers an online application will also allow you to apply by mail and circumvent the online process. This is important to know so that you do not spend too much time making certain the online systems is compatible with your computer or if you do not have free access to a computer, the mail in option will save you a lot of money in paying for computer access.
One of the most important parts of applying for your student loan consolidation loan is following up on your application to ensure it is received, properly processed, and that you are able to clarify any questions that may arise on review of your application. There are many stages that your application goes through before it is approved and completed. These stages include, verification, application review, contacting the existing loan holders, getting existing loan payoffs, etc. All of these steps and processes take time and you need to understand that the loan itself may not be consolidated within a couple of months. So be certain to keep making your payments to your current lenders during the consolidation application process, never stop making a payment until you are instructed to stop by the new lender.
The entire consolidation process is normally seamless and without major hiccups or problems. But with that having been said you want to take charge of your application and pay particular attention to step 3, follow-up, and stay on top of the the process in order to make certain it is completed. No one cares more about this issue than you, therefore it is in your best interest to make certain it happens.