Tales of Consolidation

My experience with loan consolidation was an average experience at most. It was time to graduate (so I thought). I decided to consolidate my loans at the low interest rate of 4.25% (about 3 years ago). At the time I was thinking this is the best decision. I could not find a job so I stayed in college for another year to finish up a minor. Needless to say I acquired additional loans, I assumed I would have to re-consolidate my loans. I really had to think about my options. I had two options, one to re-consolidate and lose my low interest rate from the previous consolidation or leave the two loans that acquired at a different interest rate after I consolidated out. I chose to keep the previous consolidated loans and the two additional ones I acquired (at a different interest rate). I do not have the issue of repayment to different lenders because all my loans are with the same lender. The lender separates the interest for each loan and they are pretty understandable if you are going through a hard time. I am glad I chose this lender.

Here is an example of what kind of loans can be consolidated Stafford Loans:

Subsidized and Unsubsidized

Federal Direct Stafford Loans

Subsidized and Unsubsidized

HEAL/HPSL Student Loans

Parent PLUS Loans

Federal Direct Parent PLUS Loans (these are just a few examples).

Things to remember, shop around for lenders before you choose to consolidate (for interest rates that you like). In order to consolidate your loans, loans can not be in default, you can not be a half-time student. Your loan also can not be in deferment at the time. There is not a fee to consolidate. Always keep your lender updated, when you move, change your phone number, or if your financial situation changes. Lowering your monthly payment will probably extend your loan.

Pros: It is easier to keep track of your loans and payments. You only have one lender to deal with. Sometimes if you make consecutive payment on time so of your loan is forgiven. There is repayment flexibility.

Cons: In this economy finding a lender with low interest rates will be hard. If you acquire loans after you have consolidated others, if you re-consolidate your interest rate will change.

This is my personal experience and I hope this help anyone who considering loan consolidation! Good Luck!

Works referenced:

http://www.studentloanconsolidator.com/consolidation/faq.php