| Student loan consolidation is when you work with a | | | | be in between them. This by multiplying each amount |
| lender to combine two or more student loans | | | | of the loans with their corresponding interest rate, |
| together so that you only have to make one lower | | | | then adding the total of each of those together, and |
| payment each month instead of the multiple | | | | finally dividing that total by the sum of each of the |
| payments you would normally make. | | | | original loans (without the rate included) together. For |
| Should decide to consolidate your loans you will find | | | | example, loan one was $10,000 at 5% interest rate, |
| that there are many student loan consolidation | | | | sum two was $5,000 at 6.25% interest rate, and loan |
| programs to help you. | | | | three was another $5,000 at 5.75% interest rate. |
| Before you decide on your student loan consolidation | | | | You would first multiply the loans and interest rates: |
| help you should think about how to group the loans. | | | | 10,000*.05= 500; $5,000*.0625= 312.5; |
| If you are one of those people looking for federal | | | | $5,000*.0575=287.5. Next you add the totals |
| student loan consolidation you will want to keep | | | | together: 500+312.5+287.5=1100. Now you add just |
| them separate from private student loans. The | | | | the totals of the original loans together: |
| reason for this is that you can get breaks on federal | | | | $10,000+$5,000+$5,000=$20,000. And finally you |
| student loans that are not offered with private | | | | divide the two totals together: 1,100/20,000=.055. |
| student loans, and if you just clump them all together | | | | This means that in this case the interest rate for the |
| then those offers are no longer available. | | | | consolidated loans would be 5.5%. |
| The very next thing that you will want to look at, | | | | If somebody promises that your interest rate will be |
| before you even pick a place to use, is the student | | | | lower than what you pay now, they are lying. It will |
| loan consolidation rates available. Remember you | | | | be lower than your highest rate, but it will also be |
| want to work to reduce your payments, not | | | | higher than your lowest rate. During this process you |
| increase them. | | | | should always keep in mind that the amount of |
| When you look at the interest rates available you | | | | interest you end up paying will be kept the same |
| want to remember that the rates for your | | | | throughout the entire time that you are paying off |
| consolidation are your weighted average of your | | | | your loan. |
| current rates of your current interest rates. It is | | | | When you go for a student loan consolidation, you |
| usually rounded up to the closest eighth (1/8) of a | | | | will find that there are no fees or anything to pay. It |
| percent, and finally topped at about 8.25 percent. | | | | is just a slight increase in your interest rates. For |
| If all of your interest rates are different then the | | | | those few that do require fees, they will never |
| interest rate for your student loan consolidations will | | | | require them up front, if they do, it is a scam. |