Student loan consolidation - Tilted Forum Project Discussion Community

Cedar · 08-24-2003, 06:55 PM

I have a lot of debt from grad school that I can just barely pay. I'd like to get one of those consolidation loans, but do any of you have experience with them? What are the good companies to go with? How much, if any, were your payments lowered? I'm writing three separate checks a month for my student loans (I'm done with a forebearance, so another one at this point is not an option), and besides being a pain in the ass, I'm pretty sure I could be getting a better deal elsewhere. Advice?

FastShark85 · 08-24-2003, 07:10 PM

First make sure you CAN consolidate. Some private lenders won't let you.

When I consolidated mine, I got a lower interest rate and a longer term. Lowered payments by about 33%.

Good luck!

dtheriault · 08-25-2003, 06:30 AM

remember they're not doing this to be nice to you. notice fastshark85 got lower payments by lengthening the term.

they might lower your payments, but with a lengthened term you'll end up paying more in interest over the long haul.

however, if it's the only way that you can keep paying then do it. you do not want to default on student loans it will kill your credit rating and haunt you forever.

FastShark85 · 08-25-2003, 06:39 AM

Keep a paper record of EVERYTHING you do with the consolidation company, emails, etc.

These companies are interested in doing things quickly, not correctly. Make sure every loan that's being consolidated is actually paid in full. Mine consolidation company f**ked up, to put it mildly.

johnnymysto · 08-25-2003, 09:10 AM

I can't give any advice about which companies are good, but I can warn you that they are middle-men, and should be regarded as such. Like FastShark85 said, they can screw up. They are making payments for you, and so that adds one more margin of error in the mix. This is your credit you're dealing with, so be careful.

Grouper · 08-25-2003, 02:30 PM

Do, however, remember that student loan interest rates adjust once a year (in July I believe). Interest rates are currently at their lowest historical rates. When you consolidate, you lock in at the current rate. I don't think that any of them have a pre-payment penalty so if you wanted to pay it off in the same time period, you could.

I've got about $75K from undergrad and grad school which I consolidated when I first got out. If I could do it again, I would just for the lower rates.

cowlick · 08-26-2003, 08:24 AM

Couple of considerations.
* Student loan rates have dropped year after year. If you consolidate, you no longer get advantage of the drops in rate.
* Most consolidation loans are NOT for a lower interest rate. They are usually at the amortized rate of all the individual loans, rounded UP to the nearest 1/8th of a percent.
* Best companies are ones like Sallie Mae, which actually buy your individual loans and issue you another one, as opposed to ones that just make payments for you.

Grouper · 08-27-2003, 09:32 AM

Cowlick is correct. But, as I said, interest rates adjust annually (in July I believe). Rates were really low in July. So, you're existing loan(s) interest rates should have adjusted downward. If you consolidated now, they would lock in at an average of your current rates. One can never predict whether rates will rise or fall but if I had to bet, I would only say they're going up. So next July, you're rates will likely adjust upward. Lock in now and keep the historically low rate.

FastShark85 · 08-27-2003, 09:35 AM

My loans were adjustable rates, and all of them were at their lowest (approx 5%). They are now locked in at 5%. If rates do go down further (doubtful), I'll be stuck. When they go back up (they were at over 9% just a few years ago), I'll STILL be at 5%.

I'm happy I consolidated.

08-24-2003, 06:55 PM	#1 (permalink)
Cedar Crazy Location: Hogwarts School of Witchcraft and Wizardry	Student loan consolidation I have a lot of debt from grad school that I can just barely pay. I'd like to get one of those consolidation loans, but do any of you have experience with them? What are the good companies to go with? How much, if any, were your payments lowered? I'm writing three separate checks a month for my student loans (I'm done with a forebearance, so another one at this point is not an option), and besides being a pain in the ass, I'm pretty sure I could be getting a better deal elsewhere. Advice? __________________ Do I contradict myself? Very well then I contradict myself, I am large. I contain multitudes. -Walt Whitman, Song of Myself

08-25-2003, 06:30 AM	#3 (permalink)
dtheriault Psycho Location: maybe utah	remember they're not doing this to be nice to you. notice fastshark85 got lower payments by lengthening the term. they might lower your payments, but with a lengthened term you'll end up paying more in interest over the long haul. however, if it's the only way that you can keep paying then do it. you do not want to default on student loans it will kill your credit rating and haunt you forever. __________________ "Remember, it takes two to lie. One to lie and one to listen." -Homer Unless you are the freakin Highlander, what is the point in learning how to fight with a sword?

08-25-2003, 09:10 AM	#5 (permalink)
johnnymysto Overreactor Location: South Ca'lina	I can't give any advice about which companies are good, but I can warn you that they are middle-men, and should be regarded as such. Like FastShark85 said, they can screw up. They are making payments for you, and so that adds one more margin of error in the mix. This is your credit you're dealing with, so be careful. __________________ "I'm disinclined to acquiesce to your request." - Capt. Barbossa

08-26-2003, 08:24 AM	#7 (permalink)
cowlick Insane Location: Seattle	Couple of considerations. * Student loan rates have dropped year after year. If you consolidate, you no longer get advantage of the drops in rate. * Most consolidation loans are NOT for a lower interest rate. They are usually at the amortized rate of all the individual loans, rounded UP to the nearest 1/8th of a percent. * Best companies are ones like Sallie Mae, which actually buy your individual loans and issue you another one, as opposed to ones that just make payments for you. __________________ "It's a long story," says I, and let him up.

08-24-2003, 07:10 PM	#2 (permalink)
FastShark85 Psycho Location: In the garage, under the car.	First make sure you CAN consolidate. Some private lenders won't let you. When I consolidated mine, I got a lower interest rate and a longer term. Lowered payments by about 33%. Good luck!

08-25-2003, 06:39 AM	#4 (permalink)
FastShark85 Psycho Location: In the garage, under the car.	Keep a paper record of EVERYTHING you do with the consolidation company, emails, etc. These companies are interested in doing things quickly, not correctly. Make sure every loan that's being consolidated is actually paid in full. Mine consolidation company f**ked up, to put it mildly.

08-25-2003, 02:30 PM	#6 (permalink)
Grouper Crazy	Do, however, remember that student loan interest rates adjust once a year (in July I believe). Interest rates are currently at their lowest historical rates. When you consolidate, you lock in at the current rate. I don't think that any of them have a pre-payment penalty so if you wanted to pay it off in the same time period, you could. I've got about $75K from undergrad and grad school which I consolidated when I first got out. If I could do it again, I would just for the lower rates.

08-27-2003, 09:32 AM	#8 (permalink)
Grouper Crazy	Cowlick is correct. But, as I said, interest rates adjust annually (in July I believe). Rates were really low in July. So, you're existing loan(s) interest rates should have adjusted downward. If you consolidated now, they would lock in at an average of your current rates. One can never predict whether rates will rise or fall but if I had to bet, I would only say they're going up. So next July, you're rates will likely adjust upward. Lock in now and keep the historically low rate.

08-27-2003, 09:35 AM	#9 (permalink)
FastShark85 Psycho Location: In the garage, under the car.	My loans were adjustable rates, and all of them were at their lowest (approx 5%). They are now locked in at 5%. If rates do go down further (doubtful), I'll be stuck. When they go back up (they were at over 9% just a few years ago), I'll STILL be at 5%. I'm happy I consolidated.