Consolidation - not your only repayment plan...

[edubbs5]

Did you know that you could extend your monthly payments without consolidation?

Student loans are given a standard 10-year repayment term, but if you have more than $30,000 of Federal student loans (Stafford, Consolidation, GradPlus) you are eligible (by Federal guidelines) to extend your repayment term to 25 years no consolidation needed. With consolidation, the repayment terms are also contingent on the amount of Federal student loan debt, with a maximum repayment term of 30 years.

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[Lokesh]

Here is a good link for details on school loan consolidation

http://www.schoolcolleges.com/school-loan-consolidation-1.html

Lokesh

 

[edubbs5]

Even though many lenders (all those mailings, emails, and voicemails) may tell you to consolidate this year - consolidation isn't the only answer to lower your costs.

You will of course want to consider it - especially if you have loans all over the place - but it may be in your best interest to leave your loans alone if they are already all with the same lender.

1) You can do a combined billing (vs. sending mulitple checks to the same place)
2) Your repayment incentive may be LOWER on your Stafford loan than on a consolidation loan (ask your lender questions)
3) You can extend your repayment term (i.e. lowering your montly payment by giving yourself longer to repay) without consolidation - it is a federal guideline!
4) Graduated payment plans are also available - just ask your lender!

Just thought I you should know - the benefits of keeping them seperate too...

You are more than likely never going to get an interest rate of 2.875 or 4.75 on a loan again - why would you want to combine it with higher rate loans giving yourself one interest rate. Keeping them seperate allows you the opportunty to pay down the higher rate loans faster.