For many recent college grads, paying back your student loans may be the last thing you want to think about… but the reality is, those student loan payments are going to start rolling in shortly. One option that many college graduates turn to in order to scale back on the number of payments they owe (and the amount per student loan payment) per month is to consolidate their student loans. You can learn more about student loan consolidation by visiting our student loan consolidation section, but once you have decided that student loan consolidation is the right move for you, here are “3 Tips for Student Loan Consolidation” that you are going to want to remember!
1. Understand Your Student Loan Grace Period
A 6 month grace period is allocated to almost every type of student loan after graduation, allowing you a “buffer period” before student loan payments kick in to find work. However, in-school consolidations are something you may want to look into, you will wave your 6 month grace period, but consolidating before your six-month grace period runs out could get you a lower consolidation interest rate.
2. Do Your Consolidation Loan Research!
With such high rates, there’s less incentive to consolidate your student loans this year. “With fixed-rate loans in the mix, consolidating your student loans may not work out to your advantage. Someone carrying $20,000 in Stafford loans — $15,000 consolidated at 6.625% and one $5,000, 6.8% loan — would pay a total of $7,458 over the life of the 10-year loans. That’s $100 less than the total interest you’d pay by consolidating all the loans under a 10-year repayment schedule.” - MSN Money
However, if you still find student loan consolidation the right move for you, do not be afraid to let lenders compete for your business, you will want to do some comparison shopping to make sure you are getting the best deal.
Lastly, before you make the move, check the terms of your current lenders student loans. Some lenders have stipulations which will require you to repay any discounts if you switch lenders, this could be a problem, and may make consolidating not worth it for you after all.
3. Keep Your Private Student Loans Separate From Federal Student Loans
We can NEVER stress this one enough! NEVER consolidate your federal student loans into a private consolidation loan. You will never get the rates and terms via a private consolidation loan that you would be able to receive with a federal consolidation loan. If you have both private student loans and federal student loans you need to consolidate these separately. You can not consolidate private student loans into a federal student loan.
Tags: consolidation, credit, federal student loans, Private student loans, student loan debt, student loan lenders, student loans
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