Student Loans: Consolidation

The adjusted cost of Tuition = More student Loans

Tuitions and consequently student loans have risen quite a bit over the last few years. With that also came the need to borrow more. Sometimes students borrow from multiple lenders. Or in some cases they take multiple loans from the same lender. Case in point; when I first left school in 96, I had roughly 5 loans from Sallie Mae. There were literally about 5 different payments I had to mail every months. That also included 3 different interest rates, which made payments a little skewed to say the least.

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Student Loan Consolidations can ease that problem. If you have multiple loans or multiple student loans from different companies you can have them consolidated to one company. What ends up happening is you end up paying just one loan amount each month. No need to write 5 different checks. Believe me, I was crying writing the first one. By the 5th I wanted to find Sallie Mae and tell her something. But when the Sallie Mae rep called and offered me the consolidation I kinda smiled… Kinda! Still wasn’t free like I wanted.

The advantage here is not just the option of paying one loan. Because of the difference in interest rates I was able to reduce the overall interest rate. What does that mean? You may be squirming or raising an eyebrow. It simply means they put all the interest rates together and calculate them. To the closest average. I think within like 7/8 of a percentage difference from whatever the combined rate is. In literal terms this means; if you have 3 different rates among however many loans they take the cumulative percentage. In other words 1+ 2+ 3 / 3 and give you the 7/8 difference. Don’t quote me on that. Each lender will explain their own calculations. But I think they are all standard.

What this also means; you will want to pay attention to this. This is the good part. Ready? You end up paying a little less, or a lot, depending on how much you owe. Remember, you are paying an overall lower interest rate. And!!! Yes, there’s a and. Unlike conventional student loan repayment plans these can be stretched out farther. Go ahead, ask I can almost see the hands raising. It is simple. Instead of the 10 years to repay, you can now stretch the payments further depending on the lender policy. This means a reduction in required minimum.

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Ahh the catch! You didn’t think I’d pass up the chance to throw in a twist did you? Well the catch isn’t so much a catch. There are requirements. Some lenders will only consolidate student loan amounts after a certain amount is accrued. So, if you only spent about $2000 you may be out of luck. Then again, why would you need to consolidate $2000? The reality is, the more you spend the more the lenders will be willing to work with you. For those of you who spent an arm and a leg going to school. Now you don’t have to chop them off to pay it back. You can Consolidate the loans into one easy payment, with a lower monthly rate I might add, and you can spread the payments for an even lower monthly payment.

If you are about to graduate in 2012, or you are about to start paying back student loans or already paying them back. Talk to your lender. At least one of them. See what options are available to you. Congratulations on your accomplishments by the way.

Student Loan Consolidation – Here you go.


12 comments on “Student Loans: Consolidation

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    • Hi. Thanks for the comment. There will be some. But when I sit down to write whatever is there is what comes out first. Sorry but I’m not a generic writer who blogs about one thing. I’d be too bored. They’ll come either as requested or as my mind creates it.

  4. Very welcome. It is definitely an issue that needs hashing out and something all young folks should be thinking about when leaving school. Wish all schools educated young folks leaving college about this issue

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