Consolidating Student Loans – What You Should Know

admin answers:

I haven’t consolidated loans with Key Bank, but they do a lot of business with financial aid loans. Many of my client’s use them and they have a good reputation. As with any loan, triple check the fine print for any additional catches and get everything in writing.

admin answers:

The Department of Eduction sets Federal Consolidated rates just as they do with Stafford and PLUS loans. Only difference is that Consolidated rates almost all fixed rates (there was a small period of time long ago when they were variable) and all FFELP loan rates are based off the 91 T bill and set just prior to July 1. PLUS and Stafford are variable and the rates could go up. Don’t be fooled by this past bill in Congress to lower student loan rates. It will take too long to lower the rates on your loans and then after 5 or so years the rates could go back up again.

Is it a good thing to consolidate your loans? I think at this point its a gamble. Lock in a fixed rate and rates go up? Or keep your loans separate and wait for the rates to go down?

There are other benefits: it consolidates your payments down to one and depending on your owed amount you may be able to stretch your repayment period longer than 120 months, Servicers provide incentive programs, you get the protection of a federally regulated guaranteed loan and it looks better on your credit than an unsecured loan.

Where to start, I would say stick with a reputable servicer/lender that has been in the FFELP program and does Federal Consolidated SMART loans. Also shop for a good deal on interest rates and incentive programs. Sallie Mae, Nellie Mae, Key Bank, NELNET would be good places to start.

admin answers:

Yes, your lender does not care that you didn’t finish, you got the money, you owe it.

Talk to your lender to see if they are willing to repurchase the loans together.

admin answers:

No, you cannot consolidate loans under different names. You also cannot consolidate federal loans and private loans together. Hope this helps

admin answers:

In order to accurately answer your question I would like to clarify a few things first. Are these Student Loans Private Student Loans or Federal Student Loans? In order to consolidate your Federal Student Loans under the FFELP Consolidation Loan Program you need to have at least $7,500 in Federal Student Loan debt.

Consolidating your Federal Student Loans can definately be a good idea, it can in fact help lower your credit score and improves your debt to income ratio. Also, it lowers your monthly payments and resets your forbearance and deferment time. For more in depth information on the benefits to consolidation as well as how to qualify for consolidation see the source below.

admin answers:

You should read about the different types of student loan consolidation here:

http://www.studentfinancedomain.com/student_loans/college_student_loan_consolidation.aspx

Here’s a good website to get a student loan consolidation:
http://www.studentloanconsolidator.com/

admin answers:

If you have all your loans through one company, you are required to consolidate through them, I believe.

If not, its best to go with whatever company you feel most comfortable with, probably one that you are already with. Most offer the same rates of interest (the lowest available) with similiar incentives (1/4% reduction for direct withdrawl, 1% reduction for 36-consecutive payments, etc).

Be careful when consolidating in Federal and Stafford loans though, as those have certain deferrment benefits that you lose under consolidation.

I’d probably go with whatever company you have your largest debt with, as long as they are reputible and you are comfortable with them.