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Student Consolidation Loans: Good or Bad idea?

Recently the reality stick has hit me hard: with the current set up i have, i’d owe about 400$ a month in student loans (both federal and private). That sucks pretty much. But this is also because i’m not exactly full time in my career-type job. I’m lucky in that i get to go back to school and happy deferment land, but it gets me thinking that a consolidation would be kinda awesome. They warn that it’ll fix the rate at the average, and if i’m not paying so much against principle i’ll be paying back longer, but if have the one interest rate, and pay back as if they were split (say i’d only owe 65$/mo consolidated, but around 200$/mo for just the federal) Wouldn’t i be applying more to principle, but without the same monthly requirement? Am i wrong? ANY feedback is very appreciated!

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One Response to "Student Consolidation Loans: Good or Bad idea?"

  1. Gary says:
    Student consolidation is a viable option if you have several different lenders that you simply cannot keep up with. Typically the average student will have about 5 different lenders by the time they attain a bachelors degree. All federal loans will generally have a very good interest rate of 6 or 6.5 % ie. stafford loans sub or unsub/ perkins etc. Now if you have several private loans ie. fanny mae freddy mac, student loan people etc. Those interest rates can be rather high 12 %. The main convenience would be to have one monthly payment to one lender so you know what you owe every month. Even if you have to pay longer as long as you get a lower rate you will be able to afford it more in the short term. You can always make larger payments in the future when you can afford it. Also you cant defer consolidated loans thats something to keep in mind. So defer as long as you can and get the highest level of education you can then consolidate. After all is said and done I completed an associates degree, Bachelors, and masters for under $30,000 and only have two lenders all federal.

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