How to Consolidate School Loans

You went to college. Scholarships helped to pay your college tuition but you still have a decent amount to pay back in loans. You decided to consolidate your loans. I did! Read on to discover how to consolidate school loans.

Difficulty:

Moderate

Instructions

Things You'll Need

• Internet
• Computer
• Loans
• Money
• Time
• Energy
• Patience
• Phone

1. First, it is best to consolidate school loans during your grace period. Most loans allow six months after graduation for the grad to find and secure a job before sending out the bill. This six months is your grace period. Why is this the best time to consolidate school loans? Because your interest rate is lower then. It will force you to start paying back on your loans immediately, waiving the grace period.

2. When determining a borrower, take the time to read the small print. Have questions? Don't understand something on the lender's website? Call. Talk to someone. Consolidating school loans is a good thing but can be even better if you take the time and energy to find the best borrower.

3. Check out the borrower's benefits. Some offer a percentage rate reduction after x-amount of on-time payments. This sounds great, just sign up for automatic bill pay and you're all set! But, first, check to see if you qualify for this first.

4. Speaking of that automatic bill pay? Some financial institutions will reduce the percentage rate on consolidate school loans just for signing up for auto payments.

5. Research. Take your time. Don't jump the gun and consolidate school loans with the first borrower that comes up on your google search. Your best bet is to shift through the fine print, make some phone calls, and then make an informed decision.

6. Finally, don't be surprised if your consolidated school loans are sold to another lender. If this happens (it happened to me!), don't worry. Your fixed rate will not change although the amount you pay each month may.

Tips & Warnings

• Never pay a fee to consolidate school loans!

• Do not consolidate federal loans into a private consolidation loan as you'll lose rights pertaining to federal loans.

Resources

• Student Loan Consolidator