Student loan interest rates typically are variable and change every July 1. Consolidation offers the maximum repayment term at the minimum payments with an interest rate that becomes fixed and locked-in at the time you consolidate.
Consolidation can reduce your payment amount, but consider all aspects of the repayment process. In some cases the loan payment/term will not radically change by consolidation. Weigh the immediate benefit of a reduced payment versus paying more interest in the long run. Consolidation can save you money in monthly installments by extending your loan term. Talk to one of our debt management specialists for a clearer picture.
Consolidation solves the problem of multiple servicers, bills, and/or lenders. In addition, consolidation is likely to provide cost savings and convenience.
Dependability is built through reputation. Have you ever heard of the company soliciting your business? Do you even know where your loan will be serviced?
If you consolidate during your grace period you will receive a .60% lower interest rate. However, while the interest rate for your consolidation is lower during the grace period for your loan, you may be foregoing the remainder of your grace period. If any of your loans are subsidized, the government pays the interest on those loans during the grace period. The grace period on a Stafford Loan is six months as compared to immediate repayment on a consolidation loan. You will need to weigh the interest rate reduction verses going into immediate repayment.
Why pay more if it's not necessary? Extending your repayment term could cause you to pay back more interest than your current ten-year repayment schedule. If you consolidate, consider pre-payment to lower the amount of interest repaid. Talk to us about debt management specific to your needs.
