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Apr 16th 2005

Student Loan Consolidation

A guy from one of my PoliSci classes runs an interesting site on student loan consolidation. It explains all the ins-and-outs of consolidating your student loans. For example:

Q. So, yeah, why would I want to do that?

A. Good question, glad you asked. There are several reasons why you might want to enter the wacky world of college loan consolidation. Here’s some:

Reason #1: Loan consolidation locks in your interest rate. Your original student loans are variable rate, which means that their interest rate can go up or down. Consolidated loans are fixed rate, which means that your interest rate will end right where it started. Since interest rates are very low at the moment (as all the loan consolidation companies will tell you), right now would be a good time to consolidate.

Reason #2: Loan consolidation companies are desperate money grubbers. In other words, they’ll give you incentives to get you to consolidate with them. For example, most college loan consolidation companies will give you interest discounts for signing up for some auto-pay system (expect about a .25% interest rate deduction for that). Two or three years of on time payments will lower your rate even further (expect a full 1% interest rate deduction for that).

It goes on to explain how to make the system work for you. Interesting stuff if you’ve got student loans.

8 Responses to “Student Loan Consolidation”

  1. Nicole

    I am one of those lucky ones who have not taken a loan as yet …however I plan to apply for a Student loan very soon.

    One of my seniors had consolidated with this one company last year…and he says that it was easy and quick…he got a pckage..he signed it..the DHL guys picked it up and thats it…he is enjoying the low payments and the cho sweet sounding interest rates….you could chk out these guys at 1800-446-5418…..dunno if the no. still works…but there is no harm in trying…

    Cheers

  2. Kuriakose

    Is consolidation is avilable to Non US citizens?

  3. Is consolidation is avilable to Non US citizens?
    Iam from Ahmedabad, India

  4. Dean

    By considering a student loan consolidation and remaining on your 10 years payment plan, it is possible that you can lock your interest at today’s current loan rates and save some bucks over the long haul. Aside from that, all of those loans that may have come from different lending companies or banks can be a burden to deal with. So, if you consolidate, it means that you only deal with one single company and one payment rather than several. Other than that, you have the great chance to receive added bonuses like payment and interest rate reductions in case you pay your debts on time over a period of months.

  5. Brooke

    Since rates have gone up since last year a big selling point to consolidate your student loans is to get a lower monthly payment plan, improve your credit score, and renew your forbearance and deferment options.
    Nowadays, people feel the interest rate is to high but I always make sure to stress that its more than just locking in your interest rate!

  6. noktor

    Nelnet Agrees to Pay $2 Million To Settle With New York Officials

    July 31, 2007 6:18 p.m.
    OMAHA, Neb. — Student loan company Nelnet Inc. has agreed to pay $2 million and will quit offering two services as part of a settlement with the New York state attorney general’s office.
    Officials at the Lincoln-based company disclosed the settlement Tuesday in a call with financial analysts. Nelnet agreed to abide by an industry code of conduct developed by New York Attorney General Andrew Cuomo.

    Nelnet officials also predicted Tuesday that the student loan business will become less profitable once new rules Congress is considering are approved, which could hurt borrowers.

  7. I have found that this page has helped me a lot in finding the information I needed. Hope this will do the same for you.

    http://www.juiste.net/student-loan/

  8. Moneyman

    Credit card debt is taking over the country, and most people are charging more due to the recession. This is not uncommon, however, the time is going to come when it is time to repay all of those debts and when that happens, hopefully those of you who have charged more because of lack of money will have what you need to pay off the debt. However, if you are one of the millions of Americans who find yourself in a difficult situation when it comes time for payback, then it is time to collect debt consolidation information from whatever sources that you can find.

    When considering what debt consolidation information to use, the first thing that you should do is consider the source. Where did you get the information that you are using, is it an official source? You can get a lot of information about debt consolidation on government websites, which are very reliable sources in the respect that their information will be unbiased and will not direct you to a specific company to use for your debt consolidation.

    You will learn in detail from your debt consolidation information about the two different kinds of debt consolidation, credit card consolidation loans and credit counseling services. These are two very different programs, where taking a loan means just that, however, if you have a lot of debt or bad credit you may have to use your home as collateral or get a co-signer to get the loan, which may not be idea. Credit counseling services mean that you allow a company to negotiate with your creditors for lower payments and to eliminate your interest. The downside here is that you have to close all credit accounts or the credit counseling service will not work with you, also, this does show up as a negative on your credit report, although not as negative as not paying your debts.

    There are a couple of other options that may not show up in your debt consolidation information like credit card debt settlement, which is paying a company to negotiate lump sum payments with your creditors at a value less than what you owe. Another is to just do it yourself, without the help of any companies. The upside here is that your credit is not affected if you continue to make payments on your accounts. The ultimate goal for any of these plans is to pay off your debt as quickly as possible.