Loan consolidation

[DOCTORSAIB]

PGY-2 resident here. I have several loans from several providers > 250K. Unfortunately, I didn't consolidate back in 2005-2006 during 2nd year of med school when everyone and their mother was consolidating -- partly b/c I was too focused on studying and partly b/c I was being lazy.

ANYWAYS, now that interest rates are again at an "all time low," I feel like I've been given a 2nd chance at consolidation.

But where do I begin? Do I consolidate with the Dept of Education? Salie Mae? etc? etc? I looked up old threads but a lot has changed in the financial market since then. So my questions are:

1) What criteria do I use when looking to consolidate?

2) What are the best loan company's? What about Dept of Educ?

Helps guys! Before interest rates go back up!!

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[mx_599]

i thought consolidation was no longer an option at this time

 

[devlyyn]

"Since the late 1990s, Stafford and PLUS loans have had variable rates that move up or down each year on July 1, with rates based on the three-month Treasury bill yield at the end of May. But the rules for these loans have recently changed. Rather than variable rates, new Stafford loans issued after June 30, 2006, will be fixed at 6.8 percent, while new PLUS loans will be fixed at 8.5 percent. Another important change to the rules affects current students. After June 30, students can no longer consolidate Stafford loans while they are still in school, so consider taking action now."

I'm not sure if you can consolidate since your loans were disbursed before 2006, but I don't think you can. You may have missed the boat unfortunately. You'll have to do a little research though, it may still be possible.

 

[Doctor Bagel]

"Since the late 1990s, Stafford and PLUS loans have had variable rates that move up or down each year on July 1, with rates based on the three-month Treasury bill yield at the end of May. But the rules for these loans have recently changed. Rather than variable rates, new Stafford loans issued after June 30, 2006, will be fixed at 6.8 percent, while new PLUS loans will be fixed at 8.5 percent. Another important change to the rules affects current students. After June 30, students can no longer consolidate Stafford loans while they are still in school, so consider taking action now."

I'm not sure if you can consolidate since your loans were disbursed before 2006, but I don't think you can. You may have missed the boat unfortunately. You'll have to do a little research though, it may still be possible.

The main deal is that you're stuck with the interest rates for the 2006 and onward loans. I think the op could maybe lock in lower interest rates for his pre-2006 loans. One thing I have heard is that a lot of lenders who exited the consolidation market and that the federal government is one of the few remaining players.

 

[DoctorWannaBe]

I'm a PGY-2 resident and am looking to consolidate the one loan I have with variable rates. I looked a lot last summer but decided not to since the rates dropped again this year. You probably won't get much lower rates than the current one (1.88%), so now is probably your best bet to consolidate and you'll get better rates than those of us who consolidated back in 2006. The only place I found that still does consolidation is the federal government https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp

You can usually find student loan websites that will predict the interest rate for the next year starting around June, so I would check back at that time and if they are going up then consolidate at that time. If they are going down, hold off and check again the following June.

You might as well only consolidate your variable loans (1st, 2nd, and possibly 3rd year depending on when your loan was disbursed) since you will lose any bonuses your current lender offers for repayment and your fixed loan interest rate won't change at this point.

"Since the late 1990s, Stafford and PLUS loans have had variable rates that move up or down each year on July 1, with rates based on the three-month Treasury bill yield at the end of May. But the rules for these loans have recently changed. Rather than variable rates, new Stafford loans issued after June 30, 2006, will be fixed at 6.8 percent, while new PLUS loans will be fixed at 8.5 percent. Another important change to the rules affects current students. After June 30, students can no longer consolidate Stafford loans while they are still in school, so consider taking action now."

I'm not sure if you can consolidate since your loans were disbursed before 2006, but I don't think you can. You may have missed the boat unfortunately. You'll have to do a little research though, it may still be possible.

He can still consolidate his variable loans (2004-2006) now that he's out of school. All of us who started med school before 2006 were allowed to consolidate in school until they changed the rule saying that you have to have graduated.

 

[Kitra101]

it says on the site that you consolidate at a rate based on the mean of your rates from each of the 4 years of loans. Can you consolidate at tis 1.88 % or are we stuck at 6.8%?

 

[yadayadadude]

Can you consolidate at 1.88 % or are we stuck at 6.8%?

As someone already said, it depends on when the loans were disbursed. If you're talking about loans disbursed before July 1, 2006, they are variable. When you consolidate these loans, you get the 1.88%. If your loans are from after July 1, 2006, they're fixed. Forever and ever. So when you consolidate, your consolidation interest rate is based on the weighted average of your various interest rates, rounded up to the nearest quarter percent.

Thanks, Congress.

 

[DOCTORSAIB]

BIG help guys! Thanks. I'm going to figure out how much I owe pre-2006 and likely consolidate with the gov't. I HIGHLY doubt interest rates will ever get this low.

Anything at 6.8% or worse will get paid off with a quickness when I'm done with fellowship. I really hate student loans.