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Thread: Student loan consolidation

  1. #1
    Cyburbian dandy_warhol's avatar
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    Student loan consolidation

    i graduated in august and will begin repayment on my student loans in february.

    my question is: right now i can consolidate and get a 6.625% interest rate.

    should i do it?
    In the end, we will remember not the words of our enemies, but the silence of our friends. -Martin Luther King Jr.

  2. #2
    Unfrozen Caveman Planner mendelman's avatar
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    Quote Originally posted by dandy_warhol View post
    i graduated in august and will begin repayment on my student loans in february.

    my question is: right now i can consolidate and get a 6.625% interest rate.

    should i do it?
    What are the current rates for them unconsolidated? Would the above rate be a complete benefit? Do you have a smaller loan that could be left out and paid off separately sooner?

    I had $40,000 of Fed. Stafford loans that I consolidated in 2002 at...er...~2.0%, but I left another separate $2,000 loan out and paid it off almost immediately after the 6 month deadline.

    Run the numbers and see if it benefits you. Though, I am very glad I consolidated in 2002.
    I'm sorry. Is my bias showing?

    The ends can justify the means.

  3. #3
    Cyburbian Greenescapist's avatar
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    Quote Originally posted by dandy_warhol View post
    i graduated in august and will begin repayment on my student loans in february.

    my question is: right now i can consolidate and get a 6.625% interest rate.

    should i do it?
    I consolidated last year at 2.8% Are the current rates really up to 6%? I might wait. The US House Democratic leadership said they would try to cut student loan rates. But, who knows if that will happen, though it's a popular idea.

  4. #4
    Cyburbian dandy_warhol's avatar
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    it says my interest rate is 6.54% . so i'd be locking it in at a 6.625%.

    thanks for making me look at that.

    so any ideas where i can find a consolidation loan at a lower rate?

    I consolidated last year at 2.8% Are the current rates really up to 6%? I might wait. The US House Democratic leadership said they would try to cut student loan rates. But, who knows if that will happen, though it's a popular idea.
    i want the 2.5% rates!!! so maybe i should wait?

    eeep. i don't know!!
    In the end, we will remember not the words of our enemies, but the silence of our friends. -Martin Luther King Jr.

  5. #5
    Cyburbian Plus PlannerGirl's avatar
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    I redid mine in....03 I think and got a much lower rate, cut my payments by more than half. But note it does mean the loan is for longer and if its only a slight drop in rates it wont work out over the life of the loan. If you have credit card debt pay that off first as its MUCH higher
    "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." Ben Franklin

    Remember this motto to live by: "Life should NOT be a journey to the grave with the intention of arriving safely in an attractive well preserved body, but rather to skid in sideways, chocolate in one hand, martini in the other, body thoroughly used up, totally worn out and screaming 'WOO- HOO what a ride!'"

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    Cyburbian nerudite's avatar
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    Does it affect whether it is tax deductible? I was looking into my husband's student loans and consolidating them, but under a different loan system it didn't look like we could deduct the interest from our taxes (in Canada). So that pretty much sealed the deal for me to leave them be.

  7. #7
    Cyburbian Plus PlannerGirl's avatar
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    In the US you still can but the amount drops way down becouse you are paying so much less in intrest
    "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." Ben Franklin

    Remember this motto to live by: "Life should NOT be a journey to the grave with the intention of arriving safely in an attractive well preserved body, but rather to skid in sideways, chocolate in one hand, martini in the other, body thoroughly used up, totally worn out and screaming 'WOO- HOO what a ride!'"

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    Super Moderator kjel's avatar
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    I consolidated my undergrad loans before the bend over and take it rate hike hit in July. Still my graduate loans will be at the higher rate unless some relief measure passes. Note to politicians...you are supposed to be investing in education not divesting away from it.
    "He defended the cause of the poor and needy, and so all went well. Is that not what it means to know me?" Jeremiah 22:16

  9. #9
    Cyburbian dandy_warhol's avatar
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    Me again. Still haven't consolidated. I just looked at the Direct Loan site and with the info I entered it estimated that I could consolidate and get a rate of 4.00%.

    Should I do it? Any chance that a change in the Administration with further reduce the interest rates for student loans?
    In the end, we will remember not the words of our enemies, but the silence of our friends. -Martin Luther King Jr.

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    It's worth noting that federal stafford loans became fixed rate only in July 2006 (6.8%). Thus, if you have any recent staffords, "consolidation" won't really help that much. If you have variable rate loans with lower interest rates, you can package them with the staffords for a weighted average rate that's fixed. This is only really advisable if you can't really make payments now and need to stretch things out. You also have to check about what happens to subsidized interest during deferments if you consolidate.

    Personally I'm stuck with one year's worth of variable staffords and two years worth of fixed. I have private variable loans with rates considerably lower than the fed fixed rate at the moment.

  11. #11
    Cyburbian beach_bum's avatar
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    Quote Originally posted by citizen View post
    It's worth noting that federal stafford loans became fixed rate only in July 2006 (6.8%). Thus, if you have any recent staffords, "consolidation" won't really help that much.
    Yea, I got stuck at this rate...lucky me
    "Never invest in any idea you can't illustrate with a crayon." ~Peter Lynch

  12. #12
    Cyburbian lycosidae's avatar
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    Quote Originally posted by dandy_warhol View post
    i graduated in august and will begin repayment on my student loans in february.

    my question is: right now i can consolidate and get a 6.625% interest rate.

    should i do it?
    There is no reason why you shouldn't consolidate your federal loans. There is really no disadvantage. But don't consolidate with a private company. Only consolidate with the government itself. The problem is that one day, your loans could get discharged (say, if Obama forgives student loan debt) and you don't want to pass up that opportunity by selling your government debt to a private company.

  13. #13
    I got stuck with the fixed 6.8% as well. My grad plus loan is at 7.9%. For me there is really no advantage to consolidating except stretching my payments out which I don't want to do. They also don't let you consolidate all of your loans together. I forget which ones but I know I will have my undergrad separate then all 4 of my graduate loans separate. I would only be allowed to consolidate my grad loans into two separate loans.

    I don't think you will find a private lender that will take on your loan. I looked into having Nelnet, who owns my undergrad loan, ake my grad loan on in order to get a more favorable rate but they apparently no longer do that. I'd be interested to know if anyone this year was able to get a private lender to take on their gov't loans to secure a lower interest rate.

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