Consolidating my college loans
Important questions to ask a consolidator are whether it charges origination fees, if there are prepayment penalties, what the maximum interest rate is and what the life of the loan will be.
Read the terms carefully, and if possible, have a friend or relative do the same.
" All I had to do was sign on to the Sallie Mae Web site, check off a few boxes and wait for the money to be disbursed," she says.
" The thought of repaying it never really hits you until graduation is near." If only the task of repaying student loans was as easy as taking them out.
Starting this July, borrowers who have federal student loans can opt for a new income-based repayment plan.Now, "there is no financial benefit to consolidating federal loans, other than having a single monthly payment and access to alternative repayment plans," says Mark Kantrowitz, publisher of Fin Aid, a Web site that tracks the college financial aid industry.If you can afford to make the payments on your loans, Kantrowitz says, consolidation isn't going to help you.If, for example, you stretch out a standard 10-year student loan to 20 years, you can cut monthly payments by 34%, but you will end up paying double the amount of interest over that time, Kantrowitz says.