Consolidate my loan ? yes or no

[T2urtle]

Ok i took out a loan for school. I dont start my payment untill 6 months after i graduate.


I get all these papers since day one talking about Consolidating my loan. But i dont understand what this is. Should i do it or no? How many people did this.

I always get papers in the mail from the people who i took out a loan from saying to consolidate now and say 30%-50% and like lock in 1% interest and junk like that. what gives. whats all this thing about. I need some help guys. Drop some knowledge on me please.

 

[Viper GTS]

You need to give us a lot more information.

Do you have multiple loans? If so, how much on each?
Interest rate on each loan?
Interest rate they're offering?
Refinance fees?

Viper GTS

 

[z0mb13]

make sure they dont extend your payout period

yeah they can make ur payments smaller by 30-50%, but if they more than double the number of payments you have to make then you are screwed

 

[Viper GTS]

Originally posted by: z0mb13
make sure they dont extend your payout period

yeah they can make ur payments smaller by 30-50%, but if they more than double the number of payments you have to make then you are screwed

Depends on the rate you're given.

If you're given a rate low enough that you can beat it via something like ING Direct you're crazy to pay it off any faster than you have to.

Viper GTS

 

[T2urtle]

Well honestly i dont know much on my loan. all i understood was i took out a loan and my parents did as well. but my parents have everything all paid for and what not.

My loan is for $10,000 roughly.

so Consolidating just means lower my payments but more number of payments? if it means that then i wont do it.


is Consolidating mainly for people who can't afford to pay their payments when needed? because i have the money to day w/e they want my to pay monthly. that i have no problem with so i assume Consolidating isn't for me.

 

[PowerEngineer]

As a borrower, let me suggest that you need to know a lot more about the terms of your loans than you seem to.

You make it sound as if you have a single load for $10,000. If so, then consolidation (by definition) is not for you.

I have heard that college students who have taken out loans in previous years may have some with higher interest rates than those that are (or at least have been) available recently. They may be able to consolidate their loans into one that results in lower monthly payments (with NO increase in term), and that would make good sense.

 

[T2urtle]

slowly i'm understanding this more.

I should call up my loan place " sallie mae" and talk with them. I know i start my payments 6 months after. But then they should send me a payment booklet like how my parents got it. i'll speak with them over the phone on monday and get back to you guys.

My paper shows me i can get a "you can lock a rate as low as 2.875% and reduce your payments by up to 58% or more"

I figure i should call and ask them to give me the details of my current loan. And then ask them what they have to offer and post it back up here. Since i'm a newb at this stuff.

 

[MeanMeosh]

if your (# of payments * # of payment periods) without consolidation of debt is less than or close to (# of payments * # of payments periods) after consolidation, there's no reason to consolidate your loan.

consolidation of loans is for usually for people with multiple loans and interest rates who are looking to make a single monthly payment that is less than all their payments together, or for people who are looking to reduce their interest rates.

 

[T2urtle]

i only have that 1 loan out. but lower interest rates do interest me very well only reason why i'm considering it.

 

[Dessert Tears]

It doesn't make sense for them to lower your rate outright and keep your payment periods the same. It might make sense if they're switching you from fixed to floating (adjustable) or vice versa.

See if you can get them to mail you an info package.

 

[jarfykk]

Consolidation of student loans is a great way to:

1. Lock in a low interest rate
2. Make 1 payment per month
3. Make smaller payments now and bigger ones when you're presumably making more

That said, if you only have one loan, no real need. You *may* want to look around and see if you can lower the interest rate at another lender, or see what yours has to offer (even w/o consolidation most lenders have a variety of payment plans.

I had 3 seperate loans and consolidated them all with Great Lakes Lending. Good customer service, easy online payments, no hassles.

*BE SURE to look at whether or not the consolidating people with allow you to defer payments (or make only interest payments) if you return to graduate school. Some non-Federally approved places are like that. But Fanniemae is a fine lender as they go, so call, check your interest rate, and go from there.

 

[geckojohn]

i hear the radio ad's for My Debt Negotiation... it's so funny, lolz, "When bad things happen to good people"! hahah

 

[chuckywang]

I have been getting these mails as well.

I have a Federal Perkins Loan at 5% interest with my school as my lender and it has a 9 month grace period
I also have a Substidized Federal Stafford Loan with interest capped at 8.25% with a 6 month grace period.

I keep on getting these mails telling me to consolidate because of a potential interest rate hike this summer and that I can lock in for a fixed interest rate of 1.625% for the life of my loan. I'm not sure if consolidation is for me. I don't want to bust out my diff.eq. book to see how much more total I have to pay with consolidation as opposed to without.

Are there any online calculators available?