Consolidate Private and Federal Loans Together?

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Dallman

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Should I consolidate my private and federal loans together, or should I consolidate them separately?

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NO NO NO NO!! That's never a good idea.

You cannot put private loans into the federal program, you can only put your federal loans into a private program raising your low federal interest rates up to the higher private rates - usually at least 10%. You also lose any federal benefits such as deferal and forbearance or any chance at loan forgiveness.

You can consolidate them separately but there are often few advantages to consolidating your private loans. I believe Citibank is the only one offering to fix the rates, with everyone else they are still variable so you don't really save anything. It can't hurt to call around and see what you can find though. Try My Rich Uncle, they seem to be a decent, student-oriented company. Of course one of the things I liked about them is they gave discounts for academic achievement and the government, in their infinite wisdom, has just outlawed that. I don't know what they are offering now as incentives but I'm sure they came up with something else.
 
I agree with okbye... it doesn't make sense to consolidate your private with federal loans. Also, make sure you research a lot about consolidating private loans. you rate for privates loans do not change much with consolidation of private loans. I'm not sure but do you get a fixed private loan if you consolidate the private loan separately?
 
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Private consolidations are almost always still variable. I've heard Citibank is offering a fixed rate private consolidation but that's the only one I've heard of.
 
It is always better to consolidate your federal loans separately from your private loans. If you consolidate federal loans and private loans together your loans will turn into one big private loan with a variable interest rate that is based on your credit. This means your rate won’t be fixed and could go sky high.

Also, a private loan consolidation can rack up late fees and charges just like a loan you borrow from a bank.

Thirdly, with federal loans you can postpone making payments when you cannot afford them, but you can’t do this if you consolidate them with your private loans.

Here’s some places you can go to do comparison shopping:

Federal Loan Consolidation:
http://forums.kiplinger.com/showthread.phpt=8269
http://www.bankrate.com
http://slbg.greentreegazette.com/gtree/

Private Loan Consolidation:
http://www.bankrate.com/
http://www.simpletuition.com/consolidation/looking_private_loan
 
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