College Loan Debt Consolidation

A large number of students in the United States avail of a loan for their college education. This is due to the fact that most youngsters desire to become independent early in life. To help them in their endeavor, several financing institutions have come forward with attractive schemes and flexible repayment options. However, it is not always that students get a good career start and are able to pay off the loans taken during college days, once their education is complete. At times, students strive to do several courses together and require multiple loans, which results in them having to repay more than one loan. With the rising rate of inflation, expenses soar and hence a student’s budget also gets disrupted. This is where a debt consolidation loan helps in easing the burden.

Even students with low paying jobs have hope in form of the loan consolidation methods. The consolidation company gets in touch with the student’s previous lenders and strikes a deal with them, which works out in both parties’ best interest.

Debt consolidation loans is essentially a term used wherein all the loans taken in the past are combined together into one solitary loan and a single monthly payment amount is worked out, which is payable over a period of time. This may lead to the total interest and consolidated loan amount being greater than earlier loan repayment amounts. However, this does not affect the budget since a period of 20 to 30 years is sufficient to repay the loan. To avail of the services of loan consolidation all you need to do is hire a loan consolidating company and leave it to them to figure out a repayment strategy with lower rates, as compared to all your earlier interest rates. This not only eases your debt burden but also formulates a term plan, which allows you to save money as well repay the loan.

The loan is structured in a way that as and when a student’s finances allow, he or she can increase the monthly payment amount. This is due to the fact that students are expected to get better employment in the long run.

There is no fee applicable to avail of the services of a loan consolidation company. Students need to select a loan consolidation company on the basis of their own evaluation and approach them directly. Every loan consolidation company has its own set of policies and eligibility criteria. They require documentary proof such as college mark sheets, Student Identification Card and number, and list of earlier loans complete with interest rates and term periods. They also need personal details such as date of birth, address proof, whether the student is supported by his/her family or not and other relevant information.

Irrespective of what type of educational expenditure students may have, college loans prove to be very helpful. Students can also use the money to help them with hidden costs such as books, fees, traveling home, or even supplies. College loan consolidation is also available for students who have not yet completed their education.

Found this article interesting? Then visit our website at: http://www.debtconsolidationcenter.net/ for more information on this subject, and also to find hundreds of other articles and resources about debt consolidation.

Gibran Selman takes care of http://www.debtconsolidationcenter.net/ a website dedicated to gather information, on and off the internet, about debt consolidation and other related subjects.

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The Keys to Obtaining and Refinancing Your College Loan

How many of you are biting your nails trying to figure out what you should do to get your college paid for? You know you need a loan... but what kind? What are the differences? Would it be a good idea to refinance or consolidate any loans you already have? Is this the right time? How much do you really need? What do college loans cover? If you’re wondering about these things, please read on.

Before you run out and get a college loan, you first need to know how much of a loan you are going to need. Of course, the obvious part of the loan is your tuition and the cost of your courses. But there are many other things that you may need to have covered through your college loan. This can be your room and board, school supplies, lab supplies, books, etc. But this just pertains to your actual schooling. There are other things you need to take into consideration. This can be car insurance, gas, transportation, health insurance, food, etc. You need to add all of these factors up for each year. Then, multiply it by how many years you are to be in college. This will give you a rough estimate of how much money you will need.

Some college loans can be used for anything. The lender couldn’t care less as long as you pay it back. If you plan on getting a part time job, you can count on part of your paycheck being used towards things that your college loan does not cover. However remember you’ll need to keep part of your paycheck to pay your monthly college loan payment!

Now we shall go over the several types of college loans out there. A little later, I will explain about refinancing a college loan.

First, we will go over federal student loans. These college loans can either be subsidized or unsubsidized.

Subsidized loans are when the government pays the interest of the loan for the students. You must show that you are in great financial need in order to get this type of loan.

Unsubsidized loans are when the student must pay the interest, but the interest is not deferred until after graduation. Anyone can get an unsubsidized loan. Both of these types of federal student loans are the most commonly used.

The next are private student loans. Private student loans are given to someone with a good credit score. They can be used for anything, not just the cost of tuition. They are also unsecured. This means they require no collateral, but they have extremely high interest rates.

Now, we go to for parent loans. As you guessed, this is a loan that parents can take for the full amount of the college tuition. You just have to hope mommy and daddy are willing to do this for you! The payoff rate and interest rate is much lower with this type of loan, often because parents have good credit and the funds to pay the loan off.

Now we come to consolidation loans. This type of loan is used to consolidate all of a student's loans together so they can be paid off in one easy payment plan to one lender, rather than having several payments to several lenders. Many students end up getting this type of college loan after they made the mistake of getting too many college loans at once.

Those of you, who do already have a loan, may be interested in refinancing. Refinancing college loans often seems like a good idea, and it is...if you use it to your advantage. I'll explain that in a minute. First, you need to understand a few things. Most college loans are of a variable percentage rate until the rate is locked. You lock a rate by means of a loan consolidation or by refinancing. When rates are very low, it generally is a good idea to attempt to get your loans or loan consolidated or refinanced.

Before you can even think of refinancing, you must know that is only offered to you good people that have always made their monthly loan payment on time. If this does not sound like you, then I wish you good luck trying to refinance!

Refinancing rates are usually one or two percent lower than your original college loan rate. Refinancing rates can save you up to 60 percent. But this is where the possible drawback is – and most people simply don't realize.

The “drawback” is a hidden one - that most people never see. In order to get your college loan payment lower through refinancing, you are given a much longer time period to pay the loan off. Instead of 5 years to pay it off, it can turn into 20 years to pay it off! This may sound good to you in the beginning. At the time, it will leave you with extra money that you may be in need of for other bills. But in the long run, it just costs you more money because you will be paying interest much longer to the lender. In fact, it can cost you thousands more!

The smart way to do it is after you refinance and obtain the lower rate; pay more towards the monthly bill. This way you will pay off your loan much quicker than normal and at a cheaper rate. But only put more towards paying it off when you can afford it. Remember you refinanced your college loan because you couldn't afford the payment to begin with. So now you’ve refinanced just pay off your loan as best you can at your own pace, bearing the above in mind.

I hope I didn't scare you too much. The important thing you have to remember is that most lenders gain money from you through the interest you pay them. If you pay your college loan off faster, you will make the lender less rich! Take a breather and use your head before you jump into anything. In other words "look before you leap".

© Luke Sharp 2005

Luke Sharpis a valued member of the "Online Refinance" team. After the "Luke Sharp treatment" complicated subjects seemclearer. See more articles,"poemicles", and lots of info on refinanceat http://www.onlinerefinance.net

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Student Loan Debt Consolidation

Student loan debt consolidation is a hot topic these days. As the financial burden of college costs continue to mount, graduates are finding it necessary to actively seek debt consolidation of there student loans. The truth is that a student loan debt consolidation plan is vital to starting off on firm financial ground.

Some online lenders are now offering lower interest rates on student consolidation loans. Some of these lenders are offering to take an additional 1% off the federal governments already low 7.8%. This could add up to a great savings for anyone who may be considering refinancing their student loans right now.

As of late different lenders have been competing for the market niche for student loans. That competition has pushed lenders into offering deals that were previously not available. Of course, the main beneficiary of these new packages is the customer.

This surge in competition has also increased the amount of flexibility that is available to potential borrowers. For those who may need flexible options more than they need lower payments, some lenders have started new programs that you will like.

Obtaining a student loan consolidation is often the first step in a financially secure life. Reducing total debt while lowering your monthly payment always makes sense. Most all of the new programs are offered by online lenders. This also makes applying for these loans a snap. In most cases an application can be filled out in a couple of hours, in the privacy of your home.

By shopping for your loan online you can also take advantage of looking around for the options that suit you best. These new rates will probably not last long.

Applying for a student consolidation loan is simple and hassle free...CONTINUE

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Student Loan Consolidation

Higher education comes with such high cost that by the time you finish all those years in college, you find that you are under huge debts because of the loans you had to take for books, hostel charges, traveling, research works to name a few. Now you have no other alternative than to take a student loan consolidation for pruning the debt burden.

Student loan consolidation is a very simple and most effective way of lessening debt burden. All you do is take a new loan that is at least equal to the amount you owe to different lenders. With the new loan amount you or your new lender immediately pays off all the previous loans. The student is thus relieved of the previous debts in one go.

There are many advantages in taking student loan consolidation. As the new loan is essentially availed at lower interest rate as compared to the average of interest rates on previous loans, student saves a lot of money in paying interest. While so far student was paying loan installments to different lenders, now he pays installments to just one lender.

There are many payment plans available to a student in repaying student loan consolidation. These repayment plans include standard payment of set monthly payments; graduated payment plan involving low monthly payments initially that gradually increases; variable plan that adjusts amount of payments as per changes in your income and expenses and extended payment plan allowing you to extend the loan pay off period and reduces monthly payments.

While choosing a student loan consolidation provider company make sure that it is a reputed company and does not charge high upfront fees. Also note that Federal Student Loan Consolidation makes no credit checks as the loan is backed be federal government and requires no credit checks.

Student loan consolidation comes with many discounts on interest rate on some conditions. Make sure that you have noted down the conditions laid down by different lenders for these discounts before you sign a deal.

Prefer applying online for student loan consolidation for a fast approval. Clear monthly installments of the loan in time as this goes a long way in improving your credit score that would be a great help in taking loans in future.

Peter Taylor is a senior financial analyst at Loansx with an acumen for finance and insurance. In recent years he has taken up to provide independant financial advice through his informative articles. His articles are widely read because of the lucid manner of wriiting and thoroughly researched datas. To find Student loan consolidation, Bad Credit Loans, Self Employed Loans, No Equity Loans, Debt Consolidation Loans, Fast Loans, Direct Loans that best suits your need visit http://www.loansx.co.uk

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College Consolidation Loan Student

Small Cost Student Loan Consolidation
It is certainly very unusual and fake to say no cost loan consolidation since you consolidate, it is known that there will be this thing we call interest rate. Plus that before we consolidate, we aim in reducing your payment burdens with the several loans; yet, the fact is that reducing payments still involves money or cost. Obviously, nothing should be claimed as no cost loan consolidation.

By then, students should learn that in times of loan consolidating they are decreasing the amount of loan payments. There is no possibility you can attain a zero cost loan consolidation because you are simply still paying your student loans with the loan consolidation.

Sometimes there are few people or students who don’t broadly understand loan consolidations and how they work. That is why eventhough they have enrolled already they are still not finding the supposed-to-be low cost payments. When we refer to the term loan consolidation, it is the way of combining your current standing loans of which really contributes to the high loan payments into a single loan.

On the other side, it is not that advantageous when you make consolidations. There are problems that still arise or rather appear. Like for example when you step across a deal which doesn’t favorably make out in accordance to your situation. It means that if you choose a student loan consolidation that does not have low interest rate, you can probably just end paying more that you will originally have. So don’t get much tamed because a particular company claims this and that, look on how dedicated they are in giving your needed support to get paid off of your loans through their consolidation which keeps promoting small interest rate costs.

Free Up Cash With a School Loan Consolidation

A school loan consolidation is a great way to think about being able to save yourself some money. Sounds a little too simple, doesn’t it? Well the fact is that it really isn’t much more complicated than that. Take some time to look into what a school loan consolidation is and you will see how easy it is to save yourself some cash.

School loans are loans available to college student and their parents in need of financial assistance. For some, it is either the major source or only source for income while they are in school. However, there are different types of loans, so by the end of school, you may have a number of separate student loans. That is the first place that school loan consolidation comes into play. You can get those separate loans made into one simply loan with one payment.

What a school loan consolidation is, in effect, is the same thing as any other debt consolidation or mortgage refinance. It is basically multiple debts combined into one debt; the consolidation company pays off your debts for you and you pay them back with one payment per month. With a school loan consolidation, like with any consolidation, you will end up with less overhead, lower monthly payments, and thus more money in your pocket for your personal use.

A school loan consolidation is something you really should consider whenever the consolidated loan would have a lower interest rate than the current loans do. Plus, you won’t have to be concerned with making multiple payments each month, since your school loan consolidation is just one monthly payment. In addition, many merged loans result in more flexible repayment options and no prepayment penalties. If you shop around, you can likely even find a school loan consolidation that doesn’t require a credit check.

It is important to keep an eye out for school loan consolidations that do not charge for prepayment. When you consolidate your loans, you will likely be able to refinance the loans for up to 30 years, the length of a typical mortgage. However, you will likely want to pay that off sooner once your post-college job kicks in and your earning power increases. If your school loan consolidation charges a prepayment penalty, you will end up spending more than you should on the loan. Especially since the longer the loan period is, the higher the interest rate will likely be. That is great while you are still in school, since you need more cash available and are on a tighter budget. However, once you are in the working world and have more money available, you will want to either refinance again or just pay your school loan consolidation off early.

If you, like most students, have multiple school loans, a school loan consolidation may be of great help. Students, as you know, are on tight budgets and are just trying to tread water while they are finishing their education. With a well thought out school loan consolidation, you can free up money and then make up the difference later and pay off the loans early, at least as long as you avoid consolidations with prepayment penalties.

If you would like more information on my school loan secrets, or read more articles like the one you just read, please feel free to visit my debt consolidation blog

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How to Get a School Loan Consolidation Loan

Here's an all too common story: a young person, full of hope and enthusiasm, enters school with the hopes of getting a high paying job when they graduate. They have no money, so they get a school loan to pay for their education.

Then, something goes wrong. Perhaps it's family commitments, or academic or medical problems, but for some reason they are unable to complete school. Or, they graduate from school but are unable to find a high paying job.

Either way, they are left with a school loan that they can't afford to repay. What's the solution?

One solution may be a school loan consolidation, a form of debt consolidation loan specific to a school loan, also called a student loan. Here's how it works:

You can't afford to make the payments on your school loan, so you go to a bank or other lender and apply for a school loan consolidation loan. If you have a job, you may earn enough to qualify for a debt consolidation loan.

If you do, you negotiate payment terms longer than what is on your existing school loan, so that even though it will take longer to repay the loan, your monthly payments are reduced, so you can actually afford to repay the loan.

If you can't qualify on your own, another option is to ask a friend or family member to act as a cosigner; their good credit, along with your ability to make the payments, may be enough to get you a school loan consolidation loan.

Another way to qualify for a debt consolidation loan is with outside security, such as a car or house. If you don't own a car, a friend or family member may be willing to help you out by allowing you to pledge their security as collateral.

A school loan does not need to be a death sentence. Explore your options, including a school loan consolidation loan, and work hard to get back on track financially.

Bernard Johnson has many years experience advising people on debt consolidation loans. Visit http://www.debt-consolidation-loans-information.com for information about school loan consolidation and how to consolidate a student loan

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Grace period for student loan consolidation is ending soon

If you have recent graduates in the family, remind them that they have very little time left to lock in a fixed rate on student loans they want to consolidate.

Student loan rates fluctuate, and as interest rates have been rising, so have student loan repayment rates. Locking in a rate fixes the repayment amount for the life of the loan.


The urgency is caused by a grace period that is soon ending on subsidized Stafford loans. The day after students "separate" from school, subsidized Stafford loans enter a 180-day "grace period" during which time the borrowers can consolidate their loans and lock in a fixed rate by doing so.

You can even lock in a rate on a single loan by "consolidating," even if you have no other Stafford loans, and you can also consolidate non-Stafford student loans. Subsidized Stafford loans are needs-based federal loans.

For students who graduated last May, the grace period ends in November, exactly 180 days after their graduation date.

The current lock-in rate of 6.625 percent will go up to 7.25 percent if the student is even one minute late in applying to consolidate. To help students meet the deadline, applications can be filed - and time stamped - online.

A popular consolidation program, called "Smart Loan," is run by Sallie Mae, the nation's leading provider of saving and paying-for-college programs, and the No. 1 provider of consolidation loans. The minimum balance for consolidation by Sallie Mae is $5,000.

At 6.625 percent, the lock-in rate is higher than the current repayment rate of 6.54 percent, which applies to all Stafford loans issued July 1, 1998, through June 30 this year.

Each year in July, the repayment rate is reset. If interest rates rise, repayment rates can be expected to increase next year. On the other hand, if interest rates decline, repayment rates will too.

While the lock-in rate is higher than the current repayment rate, locking-in during the grace period is far smarter than locking-in after the grace period, when the rate jumps to 7.25 percent.

To run some what-if calculations on possible repayment schedules, I highly recommend using the SallieMae loan consolidation calculator by visiting www.salliemae.com, clicking on "consolidating student loans" and then "estimate your monthly loan payments."

You'll need to know the type, balance and interest rate for each loan you need to repay. Students can find this information on their Sallie Mae accounts online. They call Sallie Mae at (800) 448-3533, Monday through Friday from 7 a.m. to 7 p.m.

The calculator estimates monthly payments for a number of different repayment options. You really need to look at all of them before making any decisions. Here is a sampling.

* Level repayment: Equal installments throughout the repayment period; $50 minimum payment.

* Max 2 Graduated Repayment: Interest-only payments for two years, followed by equal installments; $30 minimum payment.

* Max 4 Graduated Repayment: Interest-only payments for four years and two years of graduated payments, followed by equal installments; $30 minimum payment.

* Income-Sensitive Repayment: Initial payments can be set as low as 4 percent of pretax income or accruing interest.

Loan consolidation is not limited to Stafford loans.

"If you have variable rate student loans that are not consolidated and you are in your grace period, consider consolidating," says Pat Scherschel of SallieMae. Loans that are in repayment, deferment or forbearance, but not in default, are also eligible for consolidation. By consolidating, you can lock in the rate for the rest of your term.

The following loans are eligible:

* Federal Subsidized Stafford Loans

* Federal Unsubsidized Stafford

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Loans

* Federal PLUS Loans

* Supplemental Loans for Students

* Federal Consolidation Loans (you must have at least one other eligible loan to consolidate)

* Direct Subsidized Stafford Loans

* Direct Unsubsidized Stafford

Loans

* Direct PLUS Loans

* Direct Consolidation Loans

* Federal Perkins Loans

* Federal Nursing Loans

* Health Education Assistance Loans

* Other federal health education loans (e.g., HPSL and LDS loans)

You may be eligible for private student loan consolidation if you have:

* Private student loans from banks, credit unions or schools

* At least $5,000 in private student loans

* Good credit or a co-signer with good credit

* Graduated from or will be graduating from a post-secondary program.

"Between now and Thanksgiving, be sure to consider consolidating your student loans," Scherschel said.

Who should not consider consolidating? "Don't bother if you have little student debt or you think interest rates will decline," Scherschel said.

Julie Jason, JD, LLM, a money manager and principal of Jackson, Grant Investment Advisers, Inc. of Stamford, welcomes questions for consideration in her column. E-mail her at JJ@JulieJason.com or write to her c/o The Advocate and Greenwich Time, 75 Tresser Blvd., Stamford, CT 06904.

Colleges Nationwide Sign On to Offer SimpleTuition's Online Student Loan Comparison Solution

BOSTON, Nov. 15 /PRNewswire/ -- SimpleTuition, Inc. (http://www.simpletuition.com/), a company dedicated to helping students and parents make sense of educating financing choices, today announced that eight leading educational institutions have selected SimpleTuition to help their financial aid officers better assist students and parents in the college financing process.

This year alone, an estimated 10.1 million students will require federal student loans, according to the Department of Education, and each student brings his/her own unique - and sometimes complex - family financial situation. With inquiries to financial aid offices reaching an all-time high, financial aid officers face tremendous pressure to provide parents and students with the best advice and guidance to applicable loans. By offering SimpleTuition, financial aid officers can ensure their students and parents are using the most up-to-date, objective loan information available.

New SimpleTuition partners include: California Maritime Academy, Denison University (OH), Dominican University (CA), Pacific Union College (CA), Sacramento State University (CA), Stanford University Graduate School of Business (CA), University of Alaska Fairbanks (AK) and University of Puget Sound (WA).

"Financial aid professionals do not have the expertise to calculate the best financing option from the diversity of interest rates, fee arrangements and repayment offers that are made," said Nancy Hoover, Director of Financial Aid at Denison University. "SimpleTuition is this financial aid administrator's dream come true. Now I can provide a source of expert and current comparative information about multiple lenders - offers to enable students and parents to make comparison of many loans before choosing a financing option."

"Financing an advanced degree is one of the most crucial factors prospective students must consider," said Colleen MacDonald, Director of Financial Aid at Stanford University Graduate School of Business. "SimpleTuition offers innovative tools to help students decide which financing options are best for them."

With a user-friendly interface, SimpleTuition offers a resource to assist financial aid administrators by providing a third party element to help students analyze, assess and apply for student loans. The company currently offers research and comparison information for many loan types including Private, PLUS, Stafford, GradPLUS, Federal Consolidation and Private Consolidation loans that can be sorted by monthly payment, total cost of the loan, number of payments, fees and APR. SimpleTuition is not a lender itself.

"We have been meeting and working with hundreds of financial aid offices all over the U.S. and have found that they are truly aching to help parents and students as best they can but they are simply overwhelmed with questions and needs each year," said Kevin Walker, co-founder and CEO of SimpleTuition. "Our online solution provides a way for these administrators to be more efficient and objective - helping to alleviate some of the complexities surrounding family financial scenarios."

About SimpleTuition, Inc.

Founded in 2005, SimpleTuition is dedicated to helping students and parents make sense of education financing choices. Recently featured as one of Fast Company's top 12 Web 2.0 web sites, SimpleTuition is the only company to offer an independent and objective solution for researching and comparing parent, private, GradPLUS and federal loans. SimpleTuition is headquartered in Boston, Massachusetts and is funded by Atlas Venture and IDG Ventures Boston. For more information visit http://www.simpletuition.com/.

SimpleTuition, Inc.
CONTACT: Jan Jahosky, KMC Partners Public Relations, +1-407-331-4699,
jan@kmcpartners.com

Web site: http://www.simpletuition.com/

NextStudent Offers Private Student Loans to Help Subsidize Federal Student Aid for Undergraduates, Graduates

PHOENIX, AZ--(MARKET WIRE)--Nov 17, 2006 -- Phoenix-based NextStudent, a premier education funding company, offers a private student loan program for undergraduate and graduate students who have not yet applied for student loans or for those who have not received sufficient federal funds to cover the total costs of their education.
An annual maximum of $40,000 or the calculated cost of attendance (lesser amount) is available with a program maximum of $130,000. Private student loans are available for all education expenses, less any financial aid received, including tuition and fees, housing, supplies and computers. Additionally, NextStudent's private student loans have no application deadlines or fees and are available throughout the year. Preapproval often is available in minutes when student borrowers apply directly online with NextStudent's fast and easy application form.

NextStudent's Private Student Loan Program allows borrowers to control the monies they receive by distributing funds directly to the borrower. Qualification may be available with or without a co-signer. However, NextStudent approves more private student loans when there is a co-signer. There also are a variety of repayment options that can save money. In addition, interest payments could be tax-deductible.

Eligibility requirements for NextStudent's Undergraduate and Graduate Private Student Loan Programs require that students be enrolled at least half-time in a degree or certificate program at a TERI-approved school. The student loans can be used for distance learning and international students as well. TERI, The Education Resources Institute, is a nonprofit institution that guarantees all NextStudent private student loans.

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Student borrowers who need funds to make it through college or graduate school have the advantage of NextStudent's Private Student Loan Program to help them receive the education of their dreams. Repayment is on a 20-year payment plan. For those students with a cumulative balance of more than $40,000, the repayment term may be extended to 25 years. The minimum payment on private loans is $25.

NextStudent's Private Student Loan Program helps student borrowers receive the funds they need anytime during the year by eliminating the stress of application deadlines.

About NextStudent

NextStudent, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation programs, and college savings plans.

The NextStudent Scholarship Search Engine, one of the nation's oldest and largest scholarship search engines, is updated daily, available free of charge, completely private -- and represents 2.4 million scholarships worth $3.4 billion.

For more information about NextStudent and its student loan programs, please visit the company's Web site at http://www.nextstudent.com/.

Consolidation countdown for student loans

College graduates, listen up.


Graduates typically have a six-month grace period after leaving school before their first student loan payment is due. Soon the reality of all that debt will set in.
A consolidation loan allows you (or your parents, if they have a federal PLUS loan) to combine several types of federal student loans with various repayment schedules into one loan with one monthly repayment at a fixed rate. Additionally, your payments can be stretched from the standard 10 years to as long as 30, depending on your debt amount.
If you want to consolidate your loans, you have just 180 calendar days from your "separation date" to capitalize on the .60 percent interest-rate reduction given to borrowers who consolidate their loans during the grace term.
If you don't know your separation date, check first with your lender. You also can find details of your student loans by going to the National Student Loan Data System. The Web site is www.nslds.ed.gov.
The separation date is important to know because if you consolidate your loans during your grace period, you get the lower rate, which is based on the grace-period rate and is currently 6.54 percent for Stafford loans issued beginning in July 1, 1998, through June 30 of this year. If you hesitate (or procrastinate), the variable Stafford loan rate jumps to 7.14 percent.
The final rate can be different than the variable rate because when you consolidate, you lock in the weighted average of all your loans, rounded up to the nearest eighth of a percentage point.
Many lenders will offer further rate reductions under certain conditions. For example, Sallie Mae will drop your rate to 6.375 percent if you elect to have your payments taken directly out of a savings or checking account. If you make your initial 36 payments on time, you can further reduce your rate to 5.375 percent.
Before you settle on one lender, shop around for the best terms. The single holder rule was abolished this year. Now no one has an excuse not to comparison shop.
Washington Post Writers Group

Contact Michelle Singletary at The Washington Post, 1150 15th St., NW, Washington, DC 20071, or by e-mail at singletarym@washpost.com.