Student Loan Consolidation Programs

1: One of the most common mistakes people make when choosing a student loan consolidation program is not choosing a lender that they feel comfortable with. Your credit and financial well being are on the line and it is very important that you find a financial institution that does business in a manner that works for your. For example, Sallie Mae is a huge company and their wait times for customer care are very long while EdFed has a reportedly short wait time with a specialist that is assigned specifically to your account. While some people may be willing to trade the security blanket of a huge company for sub-par customer service others require a little more attention to feel good about their situation.

2: Realize that when you choose to utilize a student loan consolidation program you are lowering your monthly payment but also RAISING THE TOTAL AMOUNT OF THE LOAN. While I still advocate student loan consolidation programs in almost every situation many people do not realize that along with all of the benefits there are a few cons, this is one of them.

3: Most people do not know that timing can effect your student loan consolidation program. For example, if you consolidate before the expiration of your grace period then you can usually lock in lower rate and maintain your grace period or even have it extended. On the other hand if your grace period has expired and you are facing even the  possibility of defaulting on your student loans then lowering the payment and consolidating immediately could save your credit.

4: Be aware of any new laws coming into or out of effect. There is a new law before congress right  now that will lower student loan consolidation interest rates from 6.8% to 3.4% over the course of four years. It is obvious that being aware of any changes in interest rates and loan amounts could save you some real money.