How To Consolidate Student Loans In 4 Easy Steps
Wanting to consolidate student loans means to lump all your student loans into one loan with a single lender and repayment program. If it's your first...
Wanting to consolidate student loans means to lump all your student loans into one loan with a single lender and repayment program. If it’s your first time doing this, getting your student loans consolidated is fairly simple to do.
1. Analyze Your Options
When you consolidate student loans you will often be offered a fixed rate – this means that, even if rates increase, yours will not change. However, it’s also still the same even if rates go down. So if you think they will decline, you can wait it out. Keep in mind you do have until graduation and by then, you wouldn’t want to be in huge debt.
Next, the lender will offer you a lower monthly rate in exchange for a longer term. This means you will have paid a greater amount in the end. However, your monthly payments will be more affordable. So analyze whether you really can afford your existing monthly payments or not. Also, you have the option to consolidate all or just some of your loans.
2. Check Your Eligibility
Consolidation loans are offered for majority of federal loans as well as for private student loans. You may be eligible if you currently have more than one lender, aren’t already consolidating your student loans, have gone back to school and obtained new loans, have loans summing over $7,500, and have begun repaying your loan or are in your six-month grace period after graduation.
3. Look For Reputable Lenders
Student loan consolidators generally do not compete based on the price, so your final decision should rely on the lowest interest rate you can get. There are some ways to obtain the lowest possible rate for you. If for instance your credit score is less than perfect, you might consider having a cosigner to consolidate your loans.
4. Complete The Requirements
Once you’ve found a good company to consolidate student loans, give them the loan information they need. They’ll be the ones to call your previous lenders for the consolidation process. Make sure you understand the paperwork and ask about things like pre-payment penalties, which are fines for paying off your loan early.
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