How to Consolidate Student Loans
If you're out of college and having trouble handling your debt, you might want to consider consolidating your loans. This is a common problem for college graduates, but there are many options for you. Here are some steps for consolidating student loans.
- Difficulty:
- Moderately Easy
Instructions
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1
Be sure your credit history is in proper standing. This will help you get more favorable terms.
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2
Get a copy of your free credit report from one or all of the three major agencies (Equifax, Experian and TransUnion). Check it for accuracy and make sure to fix any problems.
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3
Run your numbers through a couple of different loan calculators to see if you'll benefit from a student loan consolidation. There are many of these calculators available on the Internet.
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4
For federal consolidation, you can apply online. Federal loans should be consolidated separately from private loans, as the rates and terms for federal loans are much better.
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For private loan consolidation, it's highly recommended to talk with a loan counselor first.
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Shop around. Call your bank and some local lenders. Look around on the Internet, too. There are thousands of companies that offer private loan consolidation.
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Compare their loan terms and run your numbers through some calculators again to choose a private consolidation lender that is most favorable to you.
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Tips & Warnings
The following common loans are eligible for federal consolidation:Direct Loans, Stafford Loans, PLUS Loans, Perkins Loans, Guaranteed Student Loans, Federal Insured Student Loans, Supplemental Loans for Students, Auxiliary Loans to Assist Students, National Direct Student Loans, National Defense Student Loans, Health Education Assistance Loans, Health Professions Student Loans, Loans for Disadvantaged Students and Nursing Student Loans.
Consolidation can lower your payments by 60%, as well as lock your interest rates.
You may defer payments on a consolidated federal loan if you decide to go back to school.
Consolidation can lengthen your repayment period.
Do not consolidate federal loans with private loans, as federal loans have much better payment terms.
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Comments
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sunshine11219
Dec 14, 2008
these are some really good tips -
aliceb76
Jul 31, 2008
Sallie Mae does NOT consolidate your school loans as of May 2008. My son soon graduates and now we have to search for a way to consolidate all his student loans into a smaller payment. We do not recommend Sallie Mae they are hard to communicate with and are NOT helpful in the least with any problems you may have during your college days and you are very likely to reach someone that does NOT speak english and is hard to understand.
