Consolidate Your Student Loan

The Student Loan Consolidation Program enables students with more than $10,000 in outstanding Federal student loans (including PLUS loans) to reduce monthly loan payments and lock in as low as 5% fixed interest rate.

You can obtain additional information on Federal and Private Student Loan Consolidation on StudentLoanConsolidator web site.

Why should you consolidate your Student Loan? Mainly because Consolidation is the other word for Simplification. By simplifying your Student Loan portfolio you will (1) reduce your points of contact, (2) have just one monthly payment and (3) get fixed interest rate.

Are all Student Loan Consolidation Programs the same?

• Conditions that are the same - Interest Rates, Repayment, Eligibility

• Conditions that are not the same - Credibility, Incentive, Service

Detailed information you can get from www.northstar.org

Factors to consider about your Student Loan Consolidation

In order to decide whether to consolidate your Student Loan or not, you should become familiar with the factors that affect this decision. The most important ones are in regard of the interest rates, the duration, the type of Student Loan, the monthly payments and so on.

• What are the interest rates?
• What is the duration of a Student Consolidation Loan?
• What is a Private Student Consolidation Loan?
• What monthly payments I can afford?
• Can a Private Student Consolidation Loan be paid off early?

More information you can find on Nelnet's web site.

Graduates Loans - Maximize your savings

If you recently graduated and are in your grace period, you are eligible to get an additional .6% interest rate reduction for the life of your loans. With a Student Loan Consolidation, borrowers can reduce their interest rate by an additional 1.25%.

The milestone to maximize your savings is to begin saving ASAP. Until 2006 Student Loan Consolidation was a tool to lock in low interest rates. Starting 2007, incentives with lenders offer additional savings (N.B. this is in case you qualify). In order to determine which Student Loans are real, reliable and can breing you more savings you can compare the savings of the Student consolidation loan with Stafford loans.

How much can you save? Check out this calculator.

Benefits of Consolidating Student Loans

Why consolidate loans? Here you can find several benefits for student loan borrowers.

• Save money from fees during the loan life;
• Saving money will give you some extra funds that you can use to inest;
• Earn a lower interest rate;
• No prepayment penalties, so you can pay off your loan sooner;
• Student loan consolidation offers a tax deductible interest.

More information you can find on OneSimpleLoan.

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Student Loan Consolidation Program Article

I have recently graduated on the 5 year saver plan from City University. The plan allows you to take as much time as you need, provided that you leave with about 15,000 dollars in student loan. Since then, I have been regularly repaying my loan, but I keep getting all kinds of Studen Loan Consolidation emails and letters in my mail box. They promise a locked interest rate of 2.3% (I am paying 3.4%). These advertisements also stating that since my loan is variable, the interest rate might go up to 8.5% at any time. It makes sense to consolidate with a fixed interest rate, but I wonder if these ads are misleading, or there is any truth to what they are saying. I began wondering If the interest rates go up, will my current student loan rate go up as well?

I have discovered that by consolidating you do lock in the current consolidation rate instead of staying on a variable rate that could go as high as 8.5% if/when interest rates go back up in the future. However, the rate normally doesn't go down when you consolidate, but instead gets rounded up. But when interest rates go up on the variable rate, you stay at the fixed rate. I have graduated last May, I am still in grace period which makes my variable rate 2.8%, but 6 months after I graduated the rate will became 3.4%. Next July 1 it will change again reflecting the rates for that new year, and it will keep changing every July 1 after that. If I consolidate, the rate will be a fixed 3.5%. In any case, since rates are low (means they might go up in the future) Student Loan Consolidation Program is a good move for me

As a disadvantage I can mention the payment length. I have discovered that consolidators tend to put me on a 30 year plan which means smaller payments but much more interest over the years. If I can afford it, I will try to get a shorter plan where I continue to pay about the same amount per month as before.