| 1. Shop around. Loan consolidation program reductions | | | | your bank account and receive an interest rate |
| vary from lender to lender, the more interest rate | | | | reduction. The interest rate reduction will generally be |
| reduction the better. There are websites such as | | | | anywhere from 0.25% to 0.5%. Automatically, each |
| that have a comprehensive list of the benefits | | | | month the loan consolidation program will take your |
| offered by student consolidation loan programs. | | | | monthly payment out of your bank account. In |
| 2. Pay off your loan as early as possible | | | | return, the lender will drop your interest rate. |
| 3. If you have variable rate Stafford loans consolidate | | | | Tip 2-Pay off Your Student Loans as Early as |
| no later than 6 months after you graduate. | | | | Possible |
| To save money with a student loan consolidation you | | | | The 2nd tip is pay-back your student loans as soon |
| need to take three things into consideration, your | | | | as possible. The less time it takes to pay back your |
| interest rate, how long it will take you to pay back | | | | loan the more money you will save. If possible, I |
| your loan, and the status and type of your student | | | | suggest paying more than your monthly dues. Here's |
| loans. | | | | an example, let's say you have picked a student loan |
| Tip 1-Shop Around | | | | consolidation program and you have $60,000 in |
| First let's talk about the interest rate. The lower your | | | | student loans with an interest rate of 5.5%. Your |
| interest rate the less you will pay on your student | | | | new student loan consolidation program gives you |
| loan consolidation. As I told you earlier the interest | | | | the option of a 30 year repayment term or 10 year |
| rate on a consolidation loan will be fixed. Once it is | | | | repayment term. Which option will you pick? Well the |
| fixed it can not go higher, but it can go lower. Many | | | | choice is up to you, but let me break it down. If you |
| student loan consolidation programs offer benefits to | | | | pay off your loan in 10 years you will end up paying |
| lower your interest rate. The main two benefits | | | | roughly $90,000. If you pay off your loan in 30 years |
| offered by student loan consolidation programs are | | | | you will end up paying roughly $120,000, a difference |
| for consecutive on-time payment and direct | | | | of roughly $30,000. If you went with the option to |
| withdrawal. The on-time payment benefit is simple. If | | | | pay off your loan in 10 years it will end up saving you |
| you make your payments on-time for a set amount | | | | a lot of money. |
| of months your interest rate will automatically drop. | | | | Tip 3-Consolidate Your Variable Rate Stafford Loans |
| Here's an example: Let's say you have a consolidation | | | | The 3rd tip is to consolidate your variable rate |
| loan with lender "A" and an interest rate of 5%. | | | | Stafford Loans no later than 6 months after you |
| Lender "A" will give you an interest rate reduction of | | | | graduate? If you have variable rate Stafford loans |
| 1.25% for consecutively making your payments | | | | the interest rate will rise 0.6% 6 months after your |
| on-time for 24 months. This means that after 24 | | | | graduate. You can find out the status and type of |
| months of making your payment on-time the interest | | | | your loan by calling your financial aide department at |
| rate will drop 1.25% creating a new interest rate of | | | | your college. |
| 3.75%, a huge money saver over the long-haul. | | | | So there you go, if follow these three student loan |
| The second benefit, direct withdrawal is even easier. | | | | consolidation tips you will save money. |
| Set up a monthly automatic direct withdrawal from | | | | |