Guide to Consolidating Student Loans at a Fixed Rate
With student loan consolidation, you have the potential of bringing some financial order to your life. Consolidating your student loans will eliminate much financial stress as you proceed with your new, non-school life.
What if all you private student loans were rolled into one bundle? Then you would have only a single monthly payment, to a single lender, at one a single day of the month, at a single fixed-rate interest, and with a single maturity date, or pay-off date. Cool? Yes? Yes.
If you are smart, when you approach a lender to consolidate your loan, you will finagle a good fixed low interest rate. And your payment to that one lender will be substantially less than the two or multiple payments you were wrestling with earlier, especially if you extend the maturity date.
Many student loans when made initially had interest rates that fluctuate with the expediencies of the lending markets and prime rate considerations. With a fixed interest rate, you do not have to worry about the markets. Once you have a rate locked in, your loan stays at that interest rate through the life of the loan. This means no unexpected surprises for your monthly budget.
Here is another factor in favor of private student loan consolidation -- it can improve your credit standing. Having a bunch of outstanding debts on your credit report does not look too red hot to prospective lenders. What looks really good is a number of debts responsibly retired. With a private student loan consolidation, a better score can be yours.
Federal Student Loans
One downside is that you will probably not want to pull your federal student loans into the same consolidation package, because federal loans usually carry terrific interest rates that may be hard to duplicate in the private lender sector. If you have one or more federal student loans, you may want to consolidate them first. A private lender who sees that you are managing your finances well by doing that, will probably be more willing to lend you money to cover your private loans.
If you are like most students, school perhaps caused you to incur rather hefty balances on one or more credit cards. If you can prove that those debts were education related, you can probably have those included in your private student loan consolidation plan as well. Your lender should be willing to work with you on this. This would be quite helpful because credit cards carry pretty high interest rates. Again, getting these off your credit report with a paid-in-full designation will only help your credit record.
Negotiating Your Interest
If you are really wise, you will go online and download a free weighted-interest rate calculator. Take it and enter the interest rates and other details across all you outstanding private student loans. This will give you an average of what you are paying in interest. This gives you a negotiating point. You want to get at least the interest the calculator specifies, but talk your way into one lower if you can.
Worth The Effort
Consolidating your student loans may seem like pretty much a hassle. It is worth it just in terms of piece of mind and bringing a little order to your financial life. Of course, what is wrong with having a little bit better cash flow in any given month? That alone is reason enough to opt for consolidation.
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ABOUT THE AUTHOR
Amanda Hash is a Guaranteed Holiday Loans Consultant with more than twenty years of experience. For more information about Bad Credit Christmas Loans, Credit Cards, Unsecured Loans, Fresh Start Loans, Debt Consolidation, Student Loans and others please visit http://www.yourloanservices.com