|
Short Time Left to Consolidate Student Loans |
| Print |
|
E-mail
|
On July 1, 2006 the variable interest rate on Stafford loans issued between 7/1/98 and 6/30/06 will be automatically reset. If you have already graduated, the rate will be reset to 7.14%. If you are a parent with a PLUS loan, the new rate will be 7.94%. If you are still in school, the new rate will be 6.54%.
You may be able to avoid this automatic increase if you consolidate your school loans.
Loan consolidation allows you to combine your payments into one lower monthly payment and extend the amount of time for repayment (up to 30 years in some cases.) In addition to lowering your interest rate, consolidated loans can have other features such as direct debit payment, automatic payments, and extended grace periods. In addition, a solid payment record on your student loan will help you build a good credit record and increase your FICO score.
Qualifying for these loans is easy and there are many companies eager for your business. Make sure you are dealing with an established company with a good reputation (a Google search can be helpful here.) Also, make sure there are no hidden fees or charges. There should be no application fee, no processing fees. and no penalty for early repayment.
Before you begin the process, be sure to have on hand a list of each student loan, the current loan balance, the current interest rate, and the name and address of the bank or company that currently holds the loan.
Remember, there is no way to reverse this process and "unconsolidate" your loans. You are only going to do this process once, and you will be living with this obligation for many years, so be sure to shop carefully and read all the fine print. |
Wealth 