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  1. #1

    College Loan Consolidation College Loan Consolidation

    Hello,

    My only remaining debts are student loans. I have paid off my credit card (as seen in a different post), and I paid off my car before that in late March of this year.

    Has anyone consolidated their student loan debt into one company? Maybe their bank or another provider? Any suggestions?


    I have $24,094.98 in a Federal Loan, $10,827.96 in an ECSI loan, and $7,300.55 in a state loan. Totaling to roughly $42,223.49. Holy smokes! :-O

    My minimum monthly payment is $330 on federal (although I've been tackling the smaller amounts in this loan with more money, roughly $350 to $500), $130 for ECSI (I've been paying $150), and $106 for State.

    I would like to lower my monthly payments so that when I am out of work I don't have to worry about paying as much, but it would still give me the freedom to pay more when I have the money coming in.

    Thank you for taking the time to read this!



  2. #2
    Let me comment on a couple of things.

    1. The only way to lower your payments is either reduce your interest rate or stretch out your repayment period. You do not want to do the latter. If you can do the former, that's great, but it probably won't make a big difference in your payments.

    2. You should focus your extra payments on the one loan with the highest interest rate. That will save you the most money in the long run.

    3. Alternatively, you could focus your extra payments on the loan with the lowest balance. The benefit of doing that is that once that loan is repaid, your total monthly payment drops.

    4. Consolidating the debt into a single loan eliminates option 3. You will lock into a payment that stays the same for the length of the repayment period. That would be counterproductive to what you want to accomplish, even if the rate is a bit lower. Also, if the consolidation loan has a variable rate, the situation would be even worse as rates are on the rise.

    Forget about consolidating. Focus your energy on either paying down the smallest balance to eliminate that monthly payment or paying down the highest interest loan to save money on interest charges.

  3. #3
    I think consolidation depends on your interest rates. I have a friend who just refinanced his 10% private loans to less than 5%. Yes, he is stuck with one payment now but the 10% was not workable.

    First Republic Bank has student loan rates for 1.95% up to 3.95%, I think. The rate depends on the term. I'm sure other banks have good rates, too.

  4. #4
    That's where consolidation makes sense. If you can significantly lower your interest rate, it will save you a ton of money.

    Just don't stretch out the repayment period in the process.

  5. #5
    I did that a few years ago...it dropped my credit score. Why...because credit life line shorten. I honestly wouldn't consolidate unless I didn't have another choice. Some of your loans already have interest rates lower than other. I'd reach out directly to lenders and see if they will negotiate an interest change, different payment arrangement and/or reduction of interest if you're automatically debiting the account monthly. There should be a few ways to save your credit score while maintaining the debt.

 

 

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