Anyone have ideas on loan consolidation....as to what companies are reputable, who has the best incentives, etc....
Trying to figure out whom to consolidate with....need help.
Appreciate any advice from the "elder" DPMs...
tx.
I have not consolidated all of my loans yet. I consolidated the first 3 years worth with Student Loan Express because they are the company that my school chose to use. I did not shop around. I have sat thru a bunch of student loan lectures so I'll tell you what I have heard so far that is important.
Here are questions to ask and why...
1. What will my interest rate be? ( this is actually set by the Fed gov so do not let them "get you" with a "this is special for you" deal.
2. Will you sell my loan with out notice? How much notice will I get? If you sell my loan will all the benefits you've offered me stay with the new loan company?
3. How many on-time payments do I have to make before getting a rate reduction? What is considered on-time? By the 1st of the month or by the 5th and at what time in the day? (Some companies actually have a time of day that the payment must be received by, eg. 12noon on the 1st of the month.
4. After I make the required number of on-time payments and get my rate reduction, if I am late once, is my rate reduction taken away? What would the rate go up to? the previous rate or the going rate at the time? What is considered late after making all my on-time payments (1 day or 3 months?)
Some other things to know...
1. If a company wants to give you money to consolidate your loan it is probably not a good deal. You may get $3000 now, but the chance of you getting a rate reduction later is slim. And that company will probably sell your loan to a company that does not offer the rate reduction benefits.
2. You'll be moving around alot so keep your address updated on the IBIS website. And keep your loan company up to date. Even though they have several ways to contact you (your phone, your cell phone, your emai, your address, you parents info, and 2 references...) they will not "really" try to contact you until after you are already late and missed the chance to get the rate reduction.
3. If a company offers you a 3% or other large reduction, make sure it is on the interest and not the principle. With the large loans that we have a 3% reduction on principle does not help especially since we will be paying for many years.
4. Keep in mind that perkins loans and subsidised loans have benifits of the gov paying off acruing interest while they are deferred. Once you consolidate you lose these benefits. Perkins is locked in at 5% rate. It does not make sense to consolidate the perkins loans until you are to start paying them back. Many people like to have one loan to pay back. (that being said, I already consolidated my perkins loans).
That is all I can think of for now.
This is the company that I might use. I have not decided yet.
Student Help Foundation
www.stuhelp.org
I hope this has helped a little bit.
