04.26.07 | A Good Time To Consolidate
With graduation time right around the corner, we’ve had a lot of customers call in asking when to consolidate their federal student loans.
First of all, federal guidelines stipulate that you can not consolidate you loans while enrolled in school more then half time. However, that doesn’t mean you have to wait until you graduate to start the process. We recommend getting in touch with a consolidation lender before you graduate. This will afford you the time to get some of your questions answered, a quote for your lower monthly payment, and information about borrower benefits. While the application can not be signed and dated until AFTER you graduate, it doesn’t hurt to do your homework and get prepared now, ahead of time. What’s the rush you ask? Interest rates are expected to increase again on July 1, 2007 – so having your application signed and submitted after you graduate and before the rate increase will most likely be a tight squeeze. Additionally, because of the influx of student loan borrowers submitting applications this spring, processing times will be inevitably delayed.
As an added benefit, if you consolidate your loans during your grace period (6 month none payment period post graduation) you can lock in your interest rate .6% lower then if you wait until your loans go into repayment. Doing so does not require that you start making payments right away. Upon applying, you can request to have your application held for your grace period end date. Your application will have been signed and submitted long before your grace period ends, but your new consolidation lender will not start billing you until that date is reached.
Stay tuned over the next few weeks for more helpful information about the interest rate change this coming July. As always, your comments and suggestions are appreciated.
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March 11th, 2010 | #
Hello,
Very interesting information. I just have one question. All this fuzz and news about the fed decreasing interest rates (by 1/2% today) does it make a difference in the interest in which I would consolidate my loans?
Is this a good time to do it? or if possible wait for rates to be lower?
September 18th, 2007 | #
when is a good time to consolidate? I am a part time undergrad who is graduating may 2008. I dont know if i can do it now since all my loans have been given to my college?
August 27th, 2007 | #
In response to the question posed by Sheya Martin on 5/1.
First of all, thanks for the comment! To answer your first question, it is wise to consolidate your student loans. While a consolidation does stretch out the term of repayment, which could increase the amount you owe, it provides immediate payment relief up front. And, because there are no penalties for extra or early repayment, you can make larger payments when it becomes affordable, offsetting any potential increase in total loan cost. With interest reducing borrower benefits, you can end up saving money.
Consolidation also helps your credit. When you consolidate all of your existing loans into one new consolidation loan, the old loans show up on your credit report as paid in full – this helps your overall credit score. Additionally, you will have fewer debts listed – another benefit for your credit.
And finally, you may consolidate subsidized, unsubsidized, direct, and federal Perkins loans together. Anymore questions feel free to comment back, or give us a call toll-free at (877) 328-1565.
May 3rd, 2007 | #
I have heard that it isn’t wise to consolidate federal student loans, that it can cause you to pay more than what you would pay if you don’t consolidate. Is this a myth and how does considation effect your credit? Lastly can you consolidate both subsidized and unsubsidized federal loans?
I just want to make wise decisions concerning my loans so I appreciate the information provided above and any other information you can provide.
Thank you
May 1st, 2007 | #