Hot deal: Student loan consolidation

[Spendthrift]

suepa fly - you said you consolidated and then reconsolidated again? i didnt realize you could reconsolidate twice. so if i consolidated back in september, can i reconsolidate with the new t-bill rate and drop my rate even further?

thanx for the help.

 

[dshodson]

u can reconsolidate if u have another new loan to consolidate with (ie at least 2 eligible loans)

the prb is that your rate will only drop slightly and not as much as if u had never consolidated the loans

D

 

[greg]

>>I'm not questioning/doubting you, I just want to know how I can get in on this too

As for the 4.5, It was 4.75 but I chose the direct pay option, and I'm assuming I'll make my first 12 payments on time (good for .25%). I don't know how I got it, I just aplpied last year and got it. I do recall that there were deadlines I met for this rate.

 

[WakeBdr]

I have four loans: 3 at 5.99% and one at 6.79%. I used the formula on the website and it told me that my new interest rate would be 6.25%. Just looking at the numbers, that is not going to save me anything. Am I missing something here?

 

[docinthebox]

The 91-day treasury bill rate on 5/28 this year was 1.76%. So compared to last year's 3.69%, this year's student loan interest rates will be 1.93% lower.

WakeBdr, to answer your question, you have 3 loans at 5.99% and 1 loan at 6.79%. Starting 7/1/2002, your 3 loans will be at 4.06% and your 1 loan will be at 4.86%, giving you a weighted interest rate of 4.32% if you consolidate.

You save money because this locks the interest rate at 4.32% for the entire life of the loans, no matter how long you take to repay them. Interest rate is not going to be this low every year.

 

[TwoMix]

So is this for people that are done w/ college and still paying loans? I have subsidized and stafford loans now im 3 out of 5 years....would some1 in my position be consolodating? thanks

 

[allisolm]

According to an article in our newspaper today (5/30), the new rate going into effect Jul 1 will indeed be 4.06% as docinthebox said and parents borrowing to finance schooling for their children will pay 4.86% (down from 6.79%). Supposed to save you $1,133 on a $10,000 loan over the loan's lifetime (10 yrs).

 

[TheBeast]

twomix,

So is this for people that are done w/ college and still paying loans? I have subsidized and stafford loans now im 3 out of 5 years....would some1 in my position be consolodating? thanks

You can consolidate at any time you want. Once you consolidate your current loans, they will all be at a fixed interest rate for the life of the loan. After you consolidate, you will have to file an in school deferment to avoid starting payment on the loans. Any loans you take out after consolidation will remain at the variable rate. If you choose, you can add your new loans to the consolidation loan (ie 1 payment/month instead of 3 or 4) at a later time. You don't end up with a better rate on the consolidation part, though, if the rates continue to go down by reconsolidating (since the consolidation loan is now a fixed interest rate no longer tied to the t-bill rate).

 

[FreebieBoy]

I HAVE Something like 10,000 in sallie mae loans and around 20,000 in federal govt loans and they start like june 10th so how can i considolate etc? What should i do any guidance?

 

[SteelCityFan]

Originally posted by: FreebieBoy
I HAVE Something like 10,000 in sallie mae loans and around 20,000 in federal govt loans and they start like june 10th so how can i considolate etc? What should i do any guidance?

You can fill out the forms online. It is really simple to do. You basically tell them who has your current loans, the approximate amounts, etc and they pay those off and you start owing them. Just read through their online documentation. You can also have them send you the forms in the mail.


I, like the post a few up, locked mine in around 4.8% last year using the same .8% reduction incentive program. The prior year, I had been paying 8%, but with the rate drop, and the incentives, it was a no brainer...

I was about to consolidate with another Federal Program that allows various banks to handle it, but luckily one bank actually had a link to the US Dept Of Education page telling their own potential customers that they might save more money by doing that! I quickly turned the people I work with onto that, and together we are saving a lot of money.

Here is another Idea... put your loan on the graduated payoff so you pay very little now... the interest is tax deductable (and starting next year there is no 5 year max on deducting student loan interest thanks to Mr Bush), and lower than most people's car payments, credit cards etc. So, taking the money you would have sent to your Student loans and dumping that on higher interest things can save you more.

Mine are pretty high since my Parents could not help much with the college bills. I am now saving about $60 a month in interest over what I was 2 years ago.. and, the rates are LOCKED! Over 10 years, that is a savings of over 7 grand for me.

If you have not done so yet, CONSOLIDATE. Don't wait until the rates increase and wish you had. 99% of student loans are Variable with a Max set at around 8.5%. When the economy takes off again, your current rates will increase.. no doubt about it.


Someone here was concerned about still being able to deduct interest from taxes... They send you a form just like you receive now telling you how much to deduct etc.

 

[SteelCityFan]

Originally posted by: WakeBdr
I have four loans: 3 at 5.99% and one at 6.79%. I used the formula on the website and it told me that my new interest rate would be 6.25%. Just looking at the numbers, that is not going to save me anything. Am I missing something here?

Yes, you are missing something...

Student loan rates are adjusted every year on July 1st. With the feds lowering rates again this past year, yours will drop even further. (They are VARIABLE). If you have had student loans for at least a couple years, look back and see what the rate was 2 years ago... much closer to 8%.

So, when July 1st hits and the rates drop even further, you can convert all of your loans to 1, and the rate you get will be FIXED for the life of the loan. I can guarentee you that the 5.99 and 6.79 you have now will not last. The rates you will see for this July will be the LOWEST EVER for Student Loans. When the economy recovers the rates will go up. If you don't get out of your VARIABLE rate loan this year (July 02-July 03), you will be at Greenspan's mercy when he begins to raise rates back to the levels of a couple years ago.

If you consolidate, you lock the incredibly low interest rates in for as long as you have your loan.

 

[dshodson]

im not sure what all the rush is for
arent these rates available until july of 2003
meaning u have over 1 year to think this over and still get the exact same rate

D

 

[c627627]

I'm not sure what all the rush is for arent these rates available until july of 2003...

BUMP for an excellent question.

Do we or do we not have until July of 2003 to decide?

 

[chexi]

I'm one of the unfortunate ones who has already consolidated. But, there is some potential good news for those of you in a similar boat. I spoke with my lender and told him how I was being innundated with countless consolidation offers. He was not at all surprised seeing as I have about $100k in student loans. He asked me to sit tight until the rate drop in July and then we could discuss lowering my existing rate. I may not be able to get it as low as if I hadn't already consolidated, but it looks like I'll be getting something. So for those of you in a similar situation, I suggest calling your lender. It helps if your consolidating lender is someone local that you know rather than Sallie Mae or some faceless behemoth, but I'd say it's worth a try no matter what. Good luck guys and gals.

 

[jasonja]

bump because I just paid off my Student loan... I'm free!!!!

 

[ValsalvaYourHeartOut]

Originally posted by: alighieri
Hmm, this could be very nice. Does anyone know if direct consolidation allows economic hardship forbearance after consolidation. I currently have 205K in medical school/undergrad debt and there is no way that I could even begin to pay interest until residency is over. Joy joy. I saw that MattH056 mentioned that economic hardshiip may not be possible but does anyone have specific site info?

Alighieri

Dood. They're gonna start paying you $$$ once residency is finished...how the hell is that economic hardship?? Psshhht.. Why don't you just moonlight during yrs 2 and 3? ...or subspecialize in...say...CARDIOLOGY...

VALSALVA

 

[Splinter]

This almost goes in the brag & moan section, but I was able to 4.25% from Sallie Mae. They'll also give another .25% for the direct payment, and another 1% if I pay on-time for 48 payments( yeah 4 years is a long time), but this seems like a great deal to get it down to 3%!!

4.25 (basic)
-0.25 (direct payment)
-1 (after 4 years of on-time payments)
= 3%

The only thing that I didn't like was that after 2+ years of paying on time, they can't apply that to the 4 years of on-time payment since this is considered a "new loan."

-Splints

 

[dshodson]

there are reasons that he/she might not want to moonlight

Some residencies forbid u from moonlighting or at least greatly discourage it (i know we do)

also u need to have an unrestricted license and depending on the state u may not be able to do that until PGY3 and obviously that costs something

finally u may have a life or your just want to concentrate on your current studies

D

 

[SuperTool]

Hi, I have student loans. I am thinking about repaying the whole thing this year. Should I consolidate or does it not matter. I have about $10K loans and some money sitting in my bank account. I wanna pay back 5K this year and 5K next winter. What does consolidation do? I am not financially gifted aside from a good job and lots of money.
I am thinking since stocks are not growing as much, It's better off to pay off the loans instead of putting this money into 401K.
Can I deduct only the interest on college loans or if I pay off the principal can I deduct that payment too?
Thanks.

 

[SteelCityFan]

The only way I would consider paying off the loans early is if that was your only debt.. since it is tax deductable, and very very low interest etc.

Consolidation locks in the low rates of today for the life of the loan. Rates will be dropping to 4%... many long term investments will totally beat that 4%. You would be better off by investing in a safe investment (One that will pretty much guarentee a >4% return), locking your loans in at 4% and paying them off on a regular schedule.

 

[SteelCityFan]

Originally posted by: c627627

I'm not sure what all the rush is for arent these rates available until july of 2003...

BUMP for an excellent question.

Do we or do we not have until July of 2003 to decide?

Yes, but what's to decide? Don't procrastinate (sp?) or you might not remember to do so...

 

[gdog3000]

"or people who can benefit, my advice is, consolidate your loans and choose the longest term repayment option. Then use the money left over each month to pay off the higher rate student loans (eg. institutional loans, which do not qualify for consolidation) as quickly as possible. "

so institutional loans dont qualify? I have $10k in a citibank student loan and $8k in two different subsidized government loans, does this only apply to the government loans, or could I also consolidate them with the citibank loan too??

 

[docinthebox]

By institutional loans, I meant university loans. Your loans should qualify for consolidation okay.

 

[c627627]

Originally posted by: SteelCityFan

Originally posted by: c627627

I'm not sure what all the rush is for arent these rates available until july of 2003...

BUMP for an excellent question.

Do we or do we not have until July of 2003 to decide?

Yes, but what's to decide? Don't procrastinate (sp?) or you might not remember to do so...

OK here's what's to decide: Let's say there are other things going on in your life and you would like to lock in the lowest rate long term but you don't want to start making payments just yet. Let's say it's June 2003, there's going to be some indication whether it's going to go up or go even lower in July 2003, isn't there? In any case, for whatever reason, we have until July 2003 to take advantage of this if we don't do it before then... right?

 

[SteelCityFan]

Yes. No one is saying do it right this second, just make sure you do it... the rates will lower in July 2002 and stay the same until July 1, 2003.

I would not expect them to go down any further. Interest rates have leveled off, the economy is beginning to recover, etc... but you are right. It can't hurt to wait. Just make sure you don't forget

I did not wait last year because they had a limited time offer (.8% reduction)...