Student Loan Refinancing – Consolidate Your Student Loans or Stick With What You’ve Got
Student Loan Consolidation – Refinancing your student student loans into one loan payment “could” save you money AND put more money in your life for other things – like clearing up debt, starting an emergency fund, building your down payment for a new home.
Student Loan Refinancing – You Should Consider Student Loan Consolidation if:
You have more than one student loan. Remember if you have several student loans but they are all with the same lender then Federal Law requires you consolidate your loans with THAT lender. If you borrowed money from more than one lender, you are free to shop around for the best rate of interest and payback schedule from any lender that is part of the Federal Student Loan Consolidation Program.
You have NOT consolidated your student loans in the past. You are only allowed one student loan debt consolidation. This is your once chance so pay attention to all the finer points of this loan. (I made the mistake of thinking I had all of my loans listed when I consolidated my student loans only to find out I had one more lurking out there and when I got in trouble financially – I could not bring that loan in under the fold of my other student loans and it was a major headache.)
Benefits of Student Loan Consolidation
One Payment Each Month
One balance on your student loans – so one debt. One payment is usually lower than the sum of several loan payments.
Fixed Rate
All interests and fees originate with that ONE loan at a fixed interest rate. Otherwise if you owe 4 loans, you will end up paying a variety of fees and interest rates depending on your payment schedule and bill paying habits.
Lower Interest Rates
Refinancing your student loans into one consolidated loan means you will not have to pay higher than 8.25% (As I write this the consolidation interest rate is 6.8%) Check the paperwork from ALL of your student loans, including Sallie Mae loans.
More Savings
Save money with automatic withdrawal. Some student loan lenders give you an interest rate break when you set up your student loans to be paid via scheduled debit payment. Make sure you will not be charged by the loan company processing your loan payment or the bank for handling this account because otherwsie you won’t save much of anything.
(It could be said – don’t give them access to your bank account. I say – set up a bank account expressly for your student loan repayments and keep only the money you need in there to make your payment. If there is little extra, there is no way anyone can take MORE than what you authorize and you will save money.)
Above all else – be cautious, read all the different consolidation offers, do the math. Don’t be quick about this decision. You can only consolidate ONCE. Make sure you have all your loans together. Make a spreadsheet or use a ledger. Get your loan totals, the interest rates and current monthly payments and how long it will take to clear your student loans without consolidating THEN run the numbers to see how much you will save. Don’t fall behind – EVER. Work with your lenders. Be Focused on paying of your debt so you can be free to enjoy what your college education brought to your life.
PS – I’m still paying off my loans so I’m right there with you 
Tags: consolidate debt, consolidate your student loan, debt, interest rate, loans, lower payments, student loan, Student Loan Refinancing
