Private Loan Consolidation?

[doclm]

Hello,

I have two small private (self) loans from firstmarkservices that I would like to consolidate. When I spoke with them, they told me that I cannot get my loans in deferment during medical school. So, then I spoke with the company that I consolidated my federal loans with and they told me that they don't currently consolidate private loans and once they did you couldn't get them placed in deferment.

Does anyone have good advice on what lenders would be able to consolidate private loans and be able to defer them until I get done with school?

Although both loans combined only comes out to be $4800.00, I pay about $80 per month in which a lot seems to go to interest with their variable rates.

Thanks for your input.

---

Members don't see this ad.

 

[mshheaddoc]

This is a tough sitation. Most private lenders do not allow deferment . I looked into this about 7-8 years ago and even with consolidation of the debt to a new lender there were certain terms that usually required being in school for the original degree which was being financed. As well as the amount of fees and higher variable rate. They know with private loans you have no options.

That being said I just did a quick search and found Sallie mae will allow deferment. Man I wish they did this when I was graduating college

http://www.salliemae.com/privateconsolidation/more_info.html

Do a search on the web for private loan consolidation deferment and see what you get. I got a bunch of hits. I also have used salliemae in the past and they are a good lender. BUT, if your credit isn't strong enough you might need a cosigner. Check it out!

 

[heech]

Hmm... maybe I'm looking at the wrong loan on that Sallie Mae link, but I don't see anything that suggests they allow deferment. It's intended for graduates, not current/new students.

The Sallie Mae Private Consolidation Loan is a financial planning debt management tool designed to help borrowers who have graduated and are already actively repaying their private loan(s). However, you may apply for this loan while currently enrolled in school if you are within 30 days of the completion of your degree or certificate.

...
When does repayment begin?

Repayment on your Sallie Mae Private Consolidation Loan begins 45 days after disbursement (after Sallie Mae has paid off the current lenders who hold the private loans you are consolidating).

Their *variable* rates are prime + 0-6%, that translates into 8%-14% (depending on credit).

 

[mshheaddoc]

Hmm... maybe I'm looking at the wrong loan on that Sallie Mae link, but I don't see anything that suggests they allow deferment. It's intended for graduates, not current/new students.



Their *variable* rates are prime + 0-6%, that translates into 8%-14% (depending on credit).

I know for a fact Sallie Mae will defer as I am currently in deferment of my private loans.

Additionally,

Can I get a deferment on my Private Consolidation Loan if I go back to school?

Yes. If you enroll at least half time in another degree or certificate program, you can defer payments on your Sallie Mae Private Consolidation Loan. However, please remember that even though payments will not be required during that time, interest will continue to accrue and will be capitalized (added to your principal amount), thereby increasing the total amount you repay.

 

[heech]

Oh you're totally right, I stand corrected. I didn't see that paragraph about deferment for those who go back to school.

 

[doclm]

This is a tough sitation. Most private lenders do not allow deferment . I looked into this about 7-8 years ago and even with consolidation of the debt to a new lender there were certain terms that usually required being in school for the original degree which was being financed. As well as the amount of fees and higher variable rate. They know with private loans you have no options.

That being said I just did a quick search and found Sallie mae will allow deferment. Man I wish they did this when I was graduating college

http://www.salliemae.com/privateconsolidation/more_info.html

Do a search on the web for private loan consolidation deferment and see what you get. I got a bunch of hits. I also have used salliemae in the past and they are a good lender. BUT, if your credit isn't strong enough you might need a cosigner. Check it out!

Thanks,

I will give them a call this Monday to see what I can do. I really appretiate the feedback.

 

[Anath]

Also -- since you're starting med school ...

To be quite honest, I would go ahead and just pay the $80/month. When you get all your loans in for med school and such, you get a rebate check in 2 lump sums -- in the fall and spring, which is supposed to be used to cover living expenses, travel etc (I dont know how your school breaks things down). But the way my school did it, you got anywhere between $7000-11,000 per semester for living expenses. As much as we all talk about being poor and such, to be honest, most of us have lived very comfortably on that budget. Usually with some money to spare -- One of my friends actually used to give back portions of his loans at the end of a semester.

These education loans are at a pretty low interest rate (compared to private loans such as yours). I would use your soon to be incoming loans to pay off your private loans.

Plus, for $80/month, just make certain sacrifices -- eat out 5 times a week instead of 7, go with that somewhat smaller apt for $50 less. Rent DVDs instead of going to the movies (that's at least $9 there!). Live off of Ramen. If you're a girl, then refrain from getting your nails professionally done and learn to do them yourself (there's another $25 at least).

Our school has been very good about getting real financial planners in to talk to us about finances, loans, etc. All of them will tell you to take advantage of those low interest rates (obviously, dont get crazy). In fact, they even told us that with graduating, if it came down to paying a minimum of our loans back vs. making payments on other things (esp things accruing higher interest like credit cards) to go ahead and make the lowest payment you can on the educational loans and take care of your other business first.

 

[Anath]

This is a tough sitation. Most private lenders do not allow deferment . I looked into this about 7-8 years ago and even with consolidation of the debt to a new lender there were certain terms that usually required being in school for the original degree which was being financed. As well as the amount of fees and higher variable rate. They know with private loans you have no options.

That being said I just did a quick search and found Sallie mae will allow deferment. Man I wish they did this when I was graduating college

http://www.salliemae.com/privateconsolidation/more_info.html

Do a search on the web for private loan consolidation deferment and see what you get. I got a bunch of hits. I also have used salliemae in the past and they are a good lender. BUT, if your credit isn't strong enough you might need a cosigner. Check it out!

The problem with that is that from what he said, this ~$5000 loan is a private/personal loan and not an educational loan that he took out for school financial aid. The Sallie Mae private loan link you have is only for educational loans, not personal.

 

[kate_g]

I would use your soon to be incoming loans to pay off your private loans.

I agree... You should just try to start thinking like a credit card company or other lender, but in reverse. Their goal is to make you pay as much in interest as possible, since to them it's profit. Your goal should be to pay as little in interest as possible, since it's pure cost that has bought you nothing. So for instance, credit card companies apply payments to lowest-interest balances first (e.g. if you got an introductory rate or special promotion). You should obviously focus on paying down your highest-interest balances first, even if it means making only the minimum payments on your lower-interest loans. As a corollary, there's Anath's consolidation trick - use extra money from lower-interest loans to pay off your high-interest balances. You still owe the same principal at the end, but you're getting charged less for it. Credit cards and other lenders only bill you monthly, even though they charge interest a day at a time. They also offer a payment amount which might not even equal the interest you've accrued since your last payment. The idea is to keep you from ever paying down the principal, so they get as much interest from you over as long a time as possible. The solution is to pay as fast as you can, and make small payments a couple times a month to reduce the number of days they can charge you interest. I'm sure if you think about it there are other common lender practices you could similarly turn on their head to gain an advantage, but those are all I can think of right now...