student loan consolidation

student loan consolidation questions and answers

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Q: What is the best student loan consolidation company?
Recently, I consolidated my student loans (undergrad, grad school loans). After I received the final break down, it appears that I will be paying double over the 25 year pay back period even with a 6% interest rate. This is ludicrous and certainly NOT what the agreement stated. I need to find a better company with better rates and soon. Any suggestions - help!!! This company is really not the best and I plan to change soon. Send links and your advice on how they have helped you!

A: When you consolidate your loans and extend the repayment period to 25 yrs (instead of the standard 10 yrs on federal loans) this increases the total amount of interest you pay over the life of the loan. Credit cards and other loans work the same way. Remember, the monthly payment is just the *minimum* you need to pay. Paying more than that each month will reduce the total interest you pay on the loan. You federal loans can't be "reconsolidated" unless you have a new (unconsolidated) loan to add to the amount. Sallie Mae is the largest lender and consolidator of student loans and they offer a lot of great info on their site, including an FAQ and a calculator so you can see what your payments will be. student loan consolidation information: http://www.salliemae.com/after_graduation/manage_your_loans/consolidate_student_loans/student_loan_consolidation.htm reconsolidating student loans: http://www.salliemae.com/after_graduation/manage_your_loans/consolidate_student_loans/reconsolidate.htm

Q: How do I find out if "Goal Financial student loan consolidation center is legitimate?
This is a lending firm for student loans is it an accreditated lending institution? Main office located @ 9477 Waples St. Suite 100 in SanDiego, Ca 92121

A: They are legit. My company services loans for them, so if you consolidate with them it would probably end up with my company.

Q: Can anyone recommend a good Student Loan Consolidation company?
I owe about $8000 dollars in student loans from various companies and I would like to consolidate into one monthly payment. Any suggestions?

A: Are these student loans that you owe Federal Student Loans or Private Student Loans? Since your loan amount is so minimal I would contact your current lender to explore your options. Or better yet you could contact the Department of Education and inquire about a Federal Student Loan Consolidation with them. The one main concern with your Federal Student Loans would be the minimum amount in order to consolidate which is $7,500; since you are so close to this amount you may want to contact your current lender to get your exact loan amounts. For more information regarding the FFELP Consolidation Loan Program please see the source below. Hope this helps you out!

Q: What is the lowest credit score I can have to get a student debt consolidation loan?
i have a lot of student loan debt and want to consolidate. however, i'm sure that because it is a private loan they're going to run my credit. do you know what is the lowest score i can have to consolidate? I don't need debt management- my bad credit is the result of the ratio between my income and huge student loans. This totally messes with your credit. I'm working with a law firm to get this under control. I just need to consolidate my loans and while I can wait until my credit improves, I want to start saving money now.

A: Around 600

Q: What's the difference between student loan consolidation companies?
The guy on the phone is telling me that they all offer the same deal and the same services, but I don't believe him. Does it matter if I go with Academic Financial Services (AFS) or Sallie Mae or any other company, or are they really all the same?

A: If you are talking about consolidating FEDERAL loans, yes, they all offer basically the same deal. Same interest rate, rate reduction for automatic debit, etc. I recently consolidated mine with a company and I was able to get a .375 additional rate reduction after 12 on-time payments because they thought I might refer my brother. So I would suggest you try to pull some weight like I did. If you are talking about PRIVATE loans, that is where the terms vary dramatically. If I were you, I would think long and hard about the rates and offers when consolidating private loans right now.

Q: What's the best student loan consolidation company?
I'm looking to consolidate a bunch of my federal student loans. I get tons of offers in the mail, but what's the best company to consolidate with? (Or, on the flipside, which companies are horrible?) Looking for tips, advice, anecdotes, etc., etc.

A: There may be something of use here.

Q: What student loan consolidation company has the lowest interest rates?


A: Different loans carry different interest rates. Some are fixed, some are variable. While it's possible to consolidate fixed--and variable-rate loans to a fixed rate. http://low-intereststudentloan-consolidation.blogspot.com/

Q: When do i need a co-signer for private student loan consolidation?
I have around $30K in private student loans that I had my brother co-sign with me on. I am paying Prime + 0% which is really nice, but I wanted to consolidate and use the LIBOR rate(which is lower then prime, I would save over 2K in 10 yrs by dropping just 1% point). I have what I think is a very good credit score (~760) and wanted to get the best rate and try to avoid asking my brother to co-sign again. Is my score high enough to go in alone without and co-signer and get the best rate? Thanks in advance.

A: You have an awesome credit rating so should have no problem getting the loan on your own.

Q: Good student loan consolidation lenders?
I am looking to consolidate my student loans with a federal consolidation loan. I know the interest rates are based on federal regulation, but I'm wondering about the other offers/benefits. If you have consolidated loans with a company, can you share personal experience about your lender--customer service, helpful website, quick loan processing, etc etc? Why did you chose your lender? Thanks!

A: I would talk to your current lender about what is offered. Some lenders have better deals if you do not consolidate. But if you do the most hassle free way is usually through your current lender. When you go through a third party it usually takes much longer to complete as the paperwork has to be sent back and forth between your current lender and your consolidating lender. Some of the more common benefits are a .25% rate reduction for setting up automatic withdrawal and a 1% interest rate reduction for making 36 (sometimes more, sometimes less) on time payments. A few will offer better than that, but not most. I would steer clear of the offers for a cash rebate after you make your first payment. If they offer this in conjunction with the other benefits than it may be worth it. But if that is all then it will save you more in the long run to go with the interest rate reduction. A lot of people will choose that because it seems like such a good deal, who wouldn't want cash up front? But anyways, with 3rd party lenders I have seen some of them just now being finished when the person filled out the consolidation application in June of 2006. It doesn't always take that long, but it definitely can. Good luck!

Q: Student loan consolidation and taxes?
If I consolidate my student loans with a private bank can I still write of the interest as a tax deduction? I am already graduated and scheduled to begin payment on the loan in April. I am currently trying to get it deferred for a few more months. If I consolidate these loans with a private loan can I still write of that interest on my taxes?

A: As long as it's still a qualifying student loan, yes. If you pay it off with a personal loan or home equity loan then no.

Q: Can someone give me advice about private student loan consolidation?
I currently have Sallie Mae loans. As many of you know they will take you to the bank on interest and other fees. Does anyone have any advice on who might be willing to consolidate these god awful private loans. I don't want to be in debt forever! Any great advice is greatly appreciated!

A: Debt consolidation http://www.investopedia.com/terms/d/debtconsolidation.asp

Q: What questions do I need to ask to get the best rates and terms on a Federal Student Loan consolidation?
Interest rates (Sallie Mae) will most likely be going up on July 1. I have received many, many offers in the mail to consolidate my school loans (these are similar to credit card offers). I do want to lock in at a fixed lower rate before rates increase. Currently, rates vary from 2.75% to 4.75%. What do I need to know to not get screwed? Are some companies more reputable than others? How would I find out? Are there hidden fees to be worried about? I graduate this June.

A: First, I need to clarify a few misconceptions in your question: 1) Interest rates on Federal Stafford Loans change EVERY July. They are set by the Federal government based on the 91-Day Treasury Bill. This July, they *will* be going up -- but his is true for all lenders, not just Sallie Mae. 2) Rates don't "vary from 2.75% to 4.75%." The current rate on all Stafford Loans for all students currently in school (or for students in their grace or deferment periods) is 4.7%. In other words, the Stafford Loan that you got as a Freshman is at 4.7%, the loan you got this year is at 4.7%... and that kid sitting next to you in Bio? His Stafford Loan is at 4.7% too (even if he borrowed with Citibank). NOTE: the student who graduated last year and consolidated last June probably has a different rate than you. This is because he consolidated before the 4.7% took effect on July 1, 2005. It's too late to get the rate he got, so take any advice he gives with a grain of salt. OK, so, the reason that you are hearing about those OTHER rates (as low as 2.7%) is because there are *tons* of companies competing for your business, so they are all are offering additional benefits (rate reductions, principal balance reductions, etc.) to students who consolidate with them. For your own sake, be cautious. There are a lot of disreputable lenders out there. In fact, the lender that offered you that rock-bottom interest rate is probably the least reputable of all. The really great, reliable lenders don't have to sell their souls to get your business. The best way to find out if a lender is reputable is to ask your Financial Aid Office -- they know which companies are good and which aren't (and they often have solid working relationships with the lenders' representatives). For your reference, Sallie Mae is the #1 Consolidation lender (i.e they do the most business). Citibank is a distant #2. These companies are on top because they rarely (if ever) sell your loans, they offer good customer service, they are technologically advanced, and they've been in "the business" for ages. For a list of other consolidation leaders, try this link: http://www.finaid.org/loans/biglenders.phtml ("consolidation" is kind of toward the bottom of the page). Most of these are reputable. Any of the top 6 would be good. There are a few other things you might want to consider: First, you need to make absolutely sure that you're getting a "Federal Consolidation Loan." Some companies have their own, sketchy version of consolidation that has nothing to do with the federal gov't. Basically, they take your nice, safe Stafford Loans and turn them into private loans with questionable terms. If you don't get a Federal Consolidation Loan, then you won't be entitled to any of the protection or benefits of the Federal Student Loan program. To protect yourself, make sure the application you complete says "Federal Consolidation Loan" at the top like this one: http://www.salliemae.com/apply/borrowing/pdf/SMARTLOAN_consol_app.pdf Second, I know that "borrower benefits" are attractive -- and I fully support getting the best ones for my students. But make sure that you're weighing the monetary benefits with the qualitative benefits. When you consolidate, you're committing to a very long relationship with a single company. That company that offered you 2.7%... Ask yourself: have you ever heard of them? Do you know anyone who has used them successfully? Are you sure that you want the 3% rate loan with the no-name company? Or would you rather have the 3.5% rate loan with a lender you know and trust. It's up to you to decide, but before you do, make sure you know how much your overall payments would really change with that half-percent reduction. Try a "loan repayment calculator" like this one: http://www.finaid.org/calculators/loanpayments.phtml Third, by all means, look into the companies with the really great-sounding benefits. Make sure you've read the "fine print": ask them how you earn the benefit, when it takes effect, and how you can potentially lose it. A lot of [good] lenders offer "principal reductions," but it's important to note that these reductions often don't take place right away and if you don't make ALL your payments on time, you may become ineligible. NOTE: this is a very good reason to set up auto-debit (so you never miss a payment). Fourth, there are NEVER any fees to consolidate. If you're working with a company that has fees, RUN -- it's a telltale sign that they are one of the "bad" companies. Finally, yes, these consolidation offers are very similar to credit card offers... except this is a much bigger decision. Unlike with credit cards, you can't just "drop" your consolidation lender. It's becoming near-impossible to reconsolidate, so make sure that you pick someone you trust. (Consider going with the lender you have now, since your school probably helped you pick them, right?) EDIT: sunshine_today is sort of correct in telling you to be wary of most of the offers that you receive in the mail. However, you will also receive legitimate mail from your lender that you should not ignore. With a *true* Federal Consolidation Loan, there are no "teaser rates" -- there are benefits that you either do or do not qualify for. Nor are there any variable rate Federal Consolidation Loans -- Federal Consolidation Loans are FIXED RATE loans. Period. (That's the whole point of consolidating!)

Q: Has the government cancelled student loan consolidation discounts? When is it effective?
I read that legislation was passed and if you consolidate or are funded after 10/1/07 you will not receive discounts. I wanted to use most of my grace period before I started consolidating but I do not want to wait if I will miss discounts.

A: better see your guidance counselor asap!