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I just graduated and looking at student loan consolidation. I am a proud graduate of 2 master degrees! Anyhow, those of you who have consolidated, did you do it through the feds or through a private lender like Chase? I see there aren't as many private lenders wanting to consolidate- times are a changing! Anyhow, I have a large amount of debt that I am looking at consolidating and was wondering what the interest rates are looking like. I heard some say there where going up and others said they were going down. Can you share your experience with your consolidation? Thanks!
I consolidated through the government. I think, but can't remember for sure, that if you consolidate with a private lender, then go back to school, the interest on subsidized loans will not be covered... but it will if you consolidate with the government. I could be wrong though. I locked in at an excellent time. My rate is 3.5%.
I still haven't consolidated ... I'm really hoping the numbers in July are super low (come on Obama) and if so, I'll consolidate with govt just in case I become eligible for the public service loan forgiveness at some point. It's all very confusing to me though... so I've been afraid to act so far.
I consolidated through the government. I think, but can't remember for sure, that if you consolidate with a private lender, then go back to school, the interest on subsidized loans will not be covered... but it will if you consolidate with the government. I could be wrong though. I locked in at an excellent time. My rate is 3.5%.
Quote:
Originally Posted by BusySocialWorker
I consolidated via nelnet - my rate lock was 1.625% so that is the very last debt i worry about paying off - love that rate!
did you guys get these rates recently? i graduated last may and have rates much higher than these. am interested in maybe refinancing but sounds like you guys just consolidated?
I consolidated through the goverment several years ago. I pay 5%, which is higher than most folks I know unfortunately. However, I've had no problem with them. I like that they are flexible in that I could choose from different payment options. I am working on deferring my subsidized loans because I am going back to school this fall (although I plan to keep making payments).
I used to work for a student loan lender. If you have federal student Loans (the three common ones are Stafford, Plus and/or Perkins), federal student loan consolidation locks in the weigted average of the current rate of your loans rounded to the nearest 1/8th of a percent.
If your loans are recent (I am rusty on the cut off dates), then you would have fixed rate loans, so you would be locking in a rate that is already locked, and rounding it up an 1/8th of a percent. If you have loans with a variable rate (I think that would be loans from before July 1, 2008, however, please verify), then you would be locking in the current rates of your loans, which should be good right now, however, please check that as well (the cap is 8.25% for Stafford).
Off the top of my head (again, rusty), if you have variable rate federal loans, and the rates are low, then it may be beneficial to consolidate as you will lock in a low rate. Also, rates change July 1st, so find out if rates of your loans are going up or down July 1st (rates should be public now), and see if you can plan accordingly (you want to weigh the rates you'd be locking in and if you lose any grace period time). Also, if you have a Perkins Loan, careful with grace periods as Perkins grace period is 9 months and the loan is fixed, so it is not always good to include it.
If you have fixed rates. reasons to consolidate would include needing more time than you are able to get with your loans without consolidating to pay off your debt, putting loans in one place, and there may be a few more that I can not remember right now.
Regarding consolidating with a lender vs. the goverment, lenders used to have great borrower benefits, such as a reduction in the interest rate after a certain amount of on time payments. However, I am not sure any still do, worth checking. I am rusty on the benefits of the government program, I could figure out of needed.
If you have private student loans, consolidation would be through lenders only. I am not sure how many lenders still offer it. Some reasons would be convenience and if you could get a better rate and/or better repayment terms.
I know you did not ask for all this! Once I started writing, I kept thinking of more!
I have currently graduated with a 4 year degree. I am attending another school for my Masters this Fall part time. My questions is do I defer the loan amount for the first four years or do I consolidate that and borrow more money needed for my Masters. Someone have good advise on what to do.
Off the top of my head (again, rusty), if you have variable rate federal loans, and the rates are low, then it may be beneficial to consolidate as you will lock in a low rate. Also, rates change July 1st, so find out if rates of your loans are going up or down July 1st (rates should be public now), and see if you can plan accordingly (you want to weigh the rates you'd be locking in and if you lose any grace period time). Also, if you have a Perkins Loan, careful with grace periods as Perkins grace period is 9 months and the loan is fixed, so it is not always good to include it.
Just waited to note that the rates on the variable rates right now are as loan as they are going to get (around 2.4% right now), so anybody in this group should consolidate before July, 2010.
Not many companies are doing these sorts of consolidations though, I'm still undecided whether I want to bother or not.
Anyhow, consolidation for recent loans is not really a good deal. You are just dramatically increasing the amount of money you have to pay by increasing the pay back period...seems sort of silly to be 50 and still paying back your student loans. But then again, it is sort of silly to take out a lot of student loans in the first place.
I think the interest rates for student loan consolidation are down at the moment. I believe this is probably the best time to consolidate. But you should consider the factors first and shop around for the best consolidation loan companies. As to whether to consolidate via federal or private, I think this depends entirely on if you have federal loans or private loans.
Last edited by toobusytoday; 09-20-2009 at 08:59 AM..
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