Student loan consolidation

[CCCHeel]

Hey, I could use some advice here. I recently graduated from graduate school and need to start paying back school loans. I am looking to consolidate. I have loans from 2 different companies.

1.) College Foundation Inc. (from undergrad)

Balance: $4328.95
Rate: 3.37% variable
Current payment: $53.00/month set up for 106 payments

2.) Direct Loans (from grad school - Stafford Loans)

Balance: $31991.37
Rate: 2.77% variable (grace period)
3.77% variable (after grace, which ends 11/03/04)
Standard payment plan: 10 years, $308.69/month

I'll take any advice I can get about consolidating my loans. I have read a lot about idapp.com, and it sounds like one of the best if not the best right now. Thank you very much for any advice you can give.

Mike

 

[Passions]

HOT DAMN!!!!! Student loan mania! OUCHAROO!!!!

This thread will help you enourmously!


http://www.fatwallet.com/t/52/262119/

 

[dullard]

From what I've seen loan consolidation places are pretty much identical. Thus you have to look at the very fine details that each company is offering. In a typical week, I'll get 3-5 consolidation junk mails and all have the exact same interest rate. They all give a 1% interest rate deduction for paying ontime for a certain period. But the fine difference comes by the length of that time period. Yes that is how subtle the differences are.

Things to think about:
1) You can consolidate with the government instead of using a private company. This may or may not give you the best deal.
2) Consolidating means you give up some rights. For example, that money you are in debt is free life and free disability insurance (if you die or get disabled, you don't have to pay it off). Once you consolidate, often you are required to pay it off no matter what. Also you give up many rights for loan deference if that situation ever arises.
3) If I remember the numbers correctly, Stafford loans charge 4% upfront (2% they keep and 2% they give back to you if you pay ontime for the first year). Thus you would likely want to get that second 2% back ($639.83 in your case). If you consolidate, in many cases (maybe all cases) you lose that $639.83 forever and don't get it back.
4) Consider how long you will actually want to take to pay off the student loans. Typically they are the best interest rate you'll ever get, thus don't rush (ie it is better to have student loans and pay for the car/house downpayment in cash than the other way around). But if you don't like to be in debt, consider the amount of time you will want to pay it off.

Combine #2 and #3. The loss of that $639.83 will not be offset if you pay off your student loans within a few years. But if instead you want to put off paying the loans for 10, 20, 30 years, etc, then a lower interest rate from consolidating is better than saving that $639.83.

I'm not saying to avoid consolidation, I'm just saying that you have to think of all angles as it isn't the right choice for everyone.

 

[Anubis]

i just consolidated with Collegiate Funding i have 17K in loans @ 2.7% 10 year payment plan, first 3 years i pay 45$/month and every year after that i pay 130$ a month until its done

the interest rate will drop to 2.2% if i sign up for direct payment from a checking account, and it drops to 1.2% is i make 30 payments on time in a row

my mom has the same plan deal but she has 50K in loans and its a 25 year payment plan, same intrest rate and such

 

[theNEOone]

Originally posted by: Anubis
i just consolidated with Collegiate Funding i have 17K in loans @ 2.7% 10 year payment plan, first 3 years i pay 45$/month and every year after that i pay 130$ a month until its done

the interest rate will drop to 2.2% if i sign up for direct payment from a checking account, and it drops to 1.2% is i make 30 payments on time in a row

my mom has the same plan deal but she has 50K in loans and its a 25 year payment plan, same intrest rate and such

wow, that's some great financing! i need to look into collegiate funding, my grace period will be up in the next few months (~Dec). should i consolidate now and lock in a lower interest rate? anyone heard of any speculation as to whether or not the fed intends to raise interest rates again?!?!


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[Anubis]

TheNeoOne I would do it sooner rather then later, when we did ours in July, the intrest rate was as low as its EVER been and i dont think its gonna get any lower

and when i consolidated i DID NOT loose my grace period

 

[welst10]

I just put the balance on my credit card with 0% APR for 12 months. At end of the promotional, I then transfer the balance to a new credit card with 0% APR for 12 months. My oginial balance was 18K and I paid 200-300/mo for past 2 years. Now I have 8K to go. And I paid $0 interest so far.

 

[villager]

Originally posted by: welst10
I just put the balance on my credit card with 0% APR for 12 months. At end of the promotional, I then transfer the balance to a new credit card with 0% APR for 12 months. My oginial balance was 18K and I paid 200-300/mo for past 2 years. Now I have 8K to go. And I paid $0 interest so far.

So you just got out of college and you got some credit cards with a limit of 20K?

 

[dullard]

Originally posted by: villager
So you just got out of college and you got some credit cards with a limit of 20K?

You are SUPPOSED to use credit cards wisely while in college. I got 2 cards when I was a freshman and by the time I graduated the total credit limit was over $30,000. Of course if you don't use a CC wisely during college (or frequently posted here, don't use them at all, leading to all kinds of other problems), then you will not be able to just go out and get $20k limits right off the bat.

 

[welst10]

Originally posted by: villager

Originally posted by: welst10
I just put the balance on my credit card with 0% APR for 12 months. At end of the promotional, I then transfer the balance to a new credit card with 0% APR for 12 months. My oginial balance was 18K and I paid 200-300/mo for past 2 years. Now I have 8K to go. And I paid $0 interest so far.

So you just got out of college and you got some credit cards with a limit of 20K?

grad school. That balance was from my car purchase. Originally I transfer the balance to 2 credit cards, each with 10K limit or so. Then I consolidated them to one card. All these cards had 0% APR for 12 months or something like that. I already switched 3-4 cards in last 2 years. My current card 0% apr expires in 03/2005 and I plan to switch soon.

 

[Passions]

mwahahahaha interesting tactic.

 

[Zombie]

I just consolidated my student loans with direct loans total of $15k at 3.62 fixed rate. This is before .25% discount if you set up auto. payment with the bank or CC.


http:loanconsolidation.ed.gov

I prefer govt. over private just in case...

 

[imported_Rusty]

This was in my mailbox this morning:


Student Loan Alert Reminder!

Interest rates for federally guaranteed student loans dropped for the fourth year in a row. The new rates are 2.77 percent for Stafford loans in the grace period, 3.37 percent for Stafford loans in repayment, and 4.17 percent for PLUS loans. These interest rates are effective until June 30, 2005.

Financial aid experts anticipate these rates will increase next year. There's also a proposal in Congress to move student loans to a variable interest rate. These factors could result in higher student loan payments. Borrowers can avoid this by consolidating their loans and locking in the current rates.



As Anubis previously stated, Collegiate Funding Services seems to be a good choice.

 

[SagaLore]

Originally posted by: CCCHeel
Balance: $4328.95
Rate: 3.37% variable
Current payment: $53.00/month set up for 106 payments

Balance: $31991.37
Rate: 2.77% variable (grace period)
3.77% variable (after grace, which ends 11/03/04)
Standard payment plan: 10 years, $308.69/month

What I would do if I had those loans, is put all extra money onto that first loan and pay it off in 3 or 4 months. Then take that extra $53 per month and add that to the second loan payment, which would be $362 per month. You'll pay it off sooner than 10 years and will beat a little bit of the compound interest.

 

[CCCHeel]

I looked over the forums on fatwallet and saw that uheaa.org has a great plan:

They automatically knock off 1.25% when you sign up for electronic debit. My loans should be consolidated at 2.82%, so that would take me to 1.47%. They also offer a 1.00% reduction after 48 consecutive on-time payments, taking my rate to .47%. Seems pretty good, huh?

Also, you can sign up for a 20-year plan with small monthly payments, and then make larger payments to reach that "48 payment" point in a very short amount of time.

 

[Rumpltzer]

Wow. The uheaa.org incentives/bonus are pretty appealing. I applied to have most of my loans consolidated last Friday using Direct Loans. They're offering a 0.25% reduction in the weighted average for electronic debit.

They allowed for an online estimate of the weighted average, though. I assume that uheaa.org will come up with the same average? The Web site doesn't seem to say, and the application is all on paper.

Hm. What to do?

Ed - Forget it. They do have a link to a calculator here. It's the same weighted average as Direct Loans.

 

[Ogg]

I wonder if I can consolidate student loans again as I consolidated back in 2000.....Anyone know?

Probably not huh

 

[Rumpltzer]

Originally posted by: Ogg
I wonder if I can consolidate student loans again as I consolidated back in 2000.....Anyone know?

Probably not huh

The FatWallet thread that someone posted above is actually really good. It starts off with sort of an FAQ that might answer your question. For an old consolidation, it is possible to consolidate under some situations.

 

[theNEOone]

Originally posted by: Anubis
TheNeoOne I would do it sooner rather then later, when we did ours in July, the intrest rate was as low as its EVER been and i dont think its gonna get any lower

and when i consolidated i DID NOT loose my grace period

well that settles it then

:calls collegiate funding::


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