Consolidate School Loan (Time to Consolidate that School Loan)
There are a lot of factors to consider when it comes time to consolidate that school loan. You have to choose your consolidation lender very carefully which means taking the time to shop around and compare the rates and deals offered. You should rather quickly be able to tell the difference between a good deal with clear cut fees and rates from a sour deal with hidden charges and variable interest rates depending on payments.
Most people have to consolidate more than one type of school loan and are altogether unclear on how to go about the process or what way is best for what type. Lenders will often not tell you what to do with your loans, they get paid whether you get a good deal or not. It is entirely up to you to make sure you consolidate your school loan with a reliable lender. To make sure you get the best that is offered, you should have a written plan of action. Write down all the information you need before you call the first lender so that when you have completed you calls to the companies you will have uniform information for them all.
To Consolidate your School Loan You will want to know:
- The lender’s name
- Types of loans they handle
- The interest rate
- The loan term
- Monthly payments expected (given your outstanding balance)
- Borrower benefits
- Fees and charges (and if they are written into the loan)
When you start calling, you will need the following information about yourself available:
- The names and types of your loans and their holders/servicers
- The balance on your loans
- Your personal contact information
- Your identification numbers such as social security and driver’s license
- Cosigner’s name (if necessary) and contact information
- References’ names (if you are putting in the application)
Things to remember while consolidating your school loan
You should always consolidate your federal and private loans separately. When you consolidate a school loan from the government with a private loan, you stand to lose your deferment and forbearance options.
You will likely get a lower rate on your federal consolidation loan because the rates for federal loans is lower overall.
Even though you are given a lower payment and longer term, you still need to be on time with your payments. A consolidation loan is just like any other and you are legally bound to repay it. If you default on this loan it will reflect on your credit report for as long as ten years (sometimes more).
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