If you are a graduate looking to consolidate your student loan, there are many pitfalls to success if you’re not careful. Here are five quick tips that students have used to successfully consolidate their student loans with a minimum of fuss and hassle. Research conducted by during the 2003-2004 National Post-Secondary Financial Aid Study, it was found that approximately 66% of undergraduate students have student loan debt averaging $19,000+ upon graduation.
According to the two-thirds (65.6%) of undergraduate students who graduate with some student loan debt, the average federal student loan debt among graduating seniors is $19,202 (Stafford and Perkins Loans). Most students are not well-educated on the facts about consolidating loans, such as getting and retaining a fixed interest rate, extending the life of their loans and lowering their monthly payments.
Consolidate your loan earlier rather than waiting until it comes due. This will help you to consolidate a lower amount that you’ll have to repay and cut the amount of time left to the end of the loan.
Get and retain a fixed interest rate and extend the life of your loan. When checking out the offer, ask for student loan consolidation advice on these options prior to accepting an offer. A fixed interest rate versus variable interest is better because it locks in the amount you will ultimately pay upon consolidation. Also, extending the life your loan will lower the monthly payments.
Go with a non-profit lender if possible. If you have a choice, go with a non-profit student loan consolidation firm such as Student Lending Works (SLW) who will offer more benefits and flexibility than standard for-profit lending agencies.
Timing is everything. Consolidate before July 1st. Typically, interest rates on student loans have been adjusted annually every July 1st. In 2007, rates will be increased by 2.1 percent.
Knowledge is power. It is important when considering a lender to get as much student loan consolidation advice as possible prior to making any decisions. A good place to start is the College Loan Corporation or the U.S. Department of Education listed below:
College Loan Corporation
U.S. Department of Education
If you are graduating, you are probably being inundated with mail and email solicitations to consolidate your student loan debt. Don’t be overwhelmed. Just take your time and delve into the various offers including interest rates, pay back schedules, interest types available and the background of the lender. It is better to stick with a well-established financial institution or non-profit lender with a solid reputation even if the rates are a bit higher. When it comes to successfully navigating the student loan consolidation jungle, it comes down to advanced preparation and research.