How Do I Go About Consolidating My Student Loans?

If you have been recently graduated from a college or university, you might be wondering how you can straighten out or bring some order to the mess of bills you face every month. Chief among them are probably your outstanding student loan bills. You may be paying different amounts, due on different days of the month, to different lenders, at various interest rates, with different maturity dates.Consolidation ConsiderationsIf you have two types of student loans, some with federal loans, some with private lending institutions. You should treat them separately because it will be tough to come up with interest rates as low as those on federal loans. You can probably get your interest rates lowered with private lenders.Consolidation FactsA consolidation loan is a loan to pay off all the private lenders to whom you are already making payments. These paid-in-full designations look good on your credit report. Also, just the convenience of have one bill instead of two or more makes getting your student loans rolled into one worth the effort. With a consolidation of your private student loans, you will probably end up paying a sum less than the aggregate of your present student loans. And there is a good chance our interest rates will be lower. That can save you hundreds over the course of the loan.Interest Rate ConcernsIf you have been paying your student loans on time, you have a good chance of getting a lower interest rate. A good move to figure out what sort of interest rate you should aim for is to go online and get one of the free weighted interest calculators. This will give you an idea of the average interest rate across all your student loan holders or creditors. And this will give you an figure to aim for or even beat.Fixed Interest RatesNo matter with whom you consolidate, you want to be sure that your interest is a fixed rate amount. Do not sign any agreement for an adjustable rate loan. This keys the interest rates to wild variability of the financial lending markets and can cause you and your budget quite a shock over the life of the loan. You want to lock in a fixed interest rate that will apply to your loan through its life.Negotiate Your Interest RateShopping around will give you an idea of what the market will bear and who can best accommodate your lifestyle and financial goals. And having quotes from other lenders when you go in to negotiate a consolidation loan lets that lender know that you have done your homework and the lender will be more inclined to offer you better rates.Home Equity LoansSpeaking of home loans, if you have been savvy enough to escape this last decade with a house and have some equity in the property, you can use it to pay off all those pesky student loans. Using your house as collateral, you can probably get some really low rates with really comfortable repayment terms.Do Not Be SurprisedWhen you are shopping around, make sure you get a handle on any administrative or carrying fees. These can be tucked away into the fine print and you may not know about them until they show up on your bill. Get a good grip on any late fees should that happen, and be sure the loan does not carry any early pay off fees or penalties.Hassle Worth ItThough it may seem like a hassle, consolidating your student loans will lend you peace of mind, increase your cash flow, and look good on your credit record. So, what is stopping you?