Questions to ask when consolidating student loans
The key terms for federal consolidation loans do not vary by lender: no application or origination fees are allowed and there are no prepayment penalties.Federal law sets the period of time for paying back the loans and sets a ceiling on the interest rate.
As with the Stafford Loans, there are both Direct and FFEL consolidation programs. I have a good job, but I have more than $100,000 in college loans from different banks coming due in two months. A: First, check to see if you have any federal loans, like Staffords.I need to consolidate them but have not found a bank willing to do so. Even if they came through a private lender, you can consolidate them through the Federal Direct Consolidation Loan program, which offers different repayment schedules that are meant to help you take control of your debt.You may also have access to a new repayment schedule (like an income-contingent plan) that’s a little easier on your wallet.If you don’t care about the extra cash and just want a consolidation for the simplicity of a single monthly payment, you can use any money you save to pay down the principal.Private consolidation lenders, on the other hand, are not subject to those terms and may include variable rates and any number of fees.
What’s more, some benefits of a federal consolidation loan, such as interest subsidies on deferred loans, are not available on private loans.
You should do enough research to be able to negotiate the most favorable terms.
Public and private loans can’t be combined, but if you have multiple private loans, you can consolidate those, too; contact your lending institutions to find out how.
Plus, consolidating could make it impossible for you to have a Perkins Loan forgiven or reduced.
If you can handle your monthly loan payment as is, carefully investigate how consolidating will change the total amount you’re expected to repay.
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.