Student Loans

How to Consolidate All Those Student Loans

Once you have graduated from college you may be one of the lucky people eligible to consolidate all of your student loans. Now, it is very important to carefully consider this option, since it is only available for you to do once. It is not a good idea to consolidate your loans with your spouse’s because then if you pass away, your estate is not responsible for the student loans. However if they are consolidated with your spouse, they will still need to pay them back. Just so that you know, this benefit is only for federal student loans. So here is how to consolidate all of those student loans.

1. First and foremost you need to make sure that you qualify for the student loan consolidation. For starters you need to have finished school, furthermore you can’t currently be enrolled in any program and you need to determine which loans qualify. Moreover you will then have the opportunity to consolidate your subsidized and unsubsidized Stafford loans.

2. Secondly, you should carefully consider which lending company that you should opt for. Many companies today will offer you further discounts for automatic draft payments or even end up giving you a lower interest rate after a certain number of ‘on time’ payments. On the other hand, some companies state that the consolidation disqualifies you from these discounts. To be safe you should carefully read the fine print regarding each student loan consolidation application, then you can’t go wrong

3. Thirdly, you do need to realize that while consolidation may be lowering your monthly payment, you will indeed end up with paying more in interest on the actual loan. The consolidation does generally take a ten year loan and it stretches up to twenty or maybe even thirty years. If you do decide to take advantage of the lower interest rate, you may consider paying it off at a quicker rate which means that you would avoid paying all of the extra payments, in short – you’ll pay less.

4. Fourthly, you will need to fill out the application for the loan. Several student loan companies have an online application available for student consolidation loans. It does depend on your financial institution, but you may have to end up by talking to someone. Before you sit down to fill out the application, you must make sure to have all of your student loan information available to you. Otherwise it may take too long for you to do and you may end up missing the deadline.

5. Finally, do make sure that you do not miss the deadline. An important thing to note is that the student loan rate increases July 1 every year. If you file before this time you will lock in a lower interest rate and save yourself some money. If you have just graduated (and you are in the six month grace period) you can still consolidate all of the loans and have the grace period for the last for six months. Then you will need to talk to customer service representative to make sure the loan company does understand exactly what you want to happen.

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