Consoladating student loans
In most cases, it doesn’t matter if you have previously consolidated some or all of your loans, as long as you’ve been making the payments on time.When you consolidate your student loans with a private bank, you pay off your old debts with a new loan that has new terms.Consolidation loans taken out before that date had a variable interest rate, determined by the individual FDLP loan origination center (e.g., in the case of a university, that university) or FFELP lender (e.g., a third party bank).In 2005, the Government Accountability Office considered consolidating consolidation loans so that they were exclusively managed through the FDLP.You can be selective and choose to consolidate your high-interest loans, but leave other loans with favorable terms intact.If you have federal loans that could be eligible for loan forgiveness after a period of time, it might be good to leave them out.
And I am going to be straight with you: Private college loans are not ideal at any time, especially now, when many lenders have left the student loan business or curtailed their lending in the wake of the financial crisis. With a private loan consolidation, your FICO credit score will determine both whether you get a loan and what the initial rate will be.I contacted student loan guru Mark Kantrowitz at Fin Aid.org, who says just three lenders still offer consolidation: Chase, Student Loan Network, and Wells Fargo. You should also know that there are no fixed rates on consolidated private loans; your interest rate will probably be tied to a benchmark like the prime rate, so when that rises, so will the rate on your loan.Finally, if you have a solid job and a solid credit score, think about looking into a personal loan at a bank or credit union.You might not be able to score a deal for the entire amount, but if you can get a fixed-rate personal loan to pay off some of the variable-rate student loan debt, that will offer you more stability.Ask Suze a question or get another answer Please note: This is general information and is not intended to be legal advice.
Alternatively, private lenders have a much broader array of options and can help you consolidate both private and federal loans into a single monthly payment.