Loan consolidation

[Vanquisher]

I just want to urge all of your who haven't consolidated your loans NOT to wait. If you can consolidate, you should do so and fast. July 1st the interest rates will go up, and I received an e-mail from my hubby's program that they are expecting them to double from 3.5% to 7.0%.

That is a huge difference! You don't lose anything by consolidating. It is the best financial decision we have made.

I have a great loan consolidation guy who helped us out a lot, and if you want his info, I would be happy to PM you with it. I do get a referral incentive if you decide to go with him, but even if you don't, you should consolidate!

All federal loans can be consolidated if you own loans from more than one source. We were looking at 8.0% interest on our student loans when we started med school, and ours got cut to 3.0%, and it will be even less than that with the incentives that loan consolidation companies offer. We are in deferment. We still have all the same deferment and forebearance rights.

Anyway, I hope this is appropriate, but I wanted to make sure that everyone knew that consolidation is a GOOD thing!

[houseelf]

Here, here. I refinanced mine in 1999 at 7.5%. I refinanced DH's (twice my amount) at 3.25% in 2004. The projected payments are about the same.

Kelly

I agree with Heidi -- take the plunge! Go for it! I am so glad DH consolidated. We had some misinformation about it and thought that doing so would mean losing forebearance which was not true. (All for federal loans).

His loans ranged from 7% to slightly over 8% and I think he got them down to 3.5% or a little higher (definitely under 4%). It makes a HUGE difference. With the incentives Heidi mentioned, setting up auto-withdrawal and on-time payment, it gets even lower. Once July 1 passes, you are stuck with what will likely be higher rates.

Okay, so I've been inspired to go online and get my federal pin and start browsing the application for consolidating through the department of education. I'm eligible since I have one direct loan and other non-direct loans. I'm that I didn't do this earlier. I'm going to look up my loans, compute the weighted averages / etc., and see what consolidation will mean.

My question is has anyone done this through the US Dept of Education and done it electronically? Any tips?

I noticed in the FAQ section that it usually takes 60 - 90 days from the date of application to complete the consolidation process and it's quicker if you do it electronically. Okay, dumb question -- if I do my part before July 1 but the whole process isn't completed until after July 1, do I get the pre-July 1 rates for my efforts?

Kevin,
I'll try to remember to ask DH about this tonight. I believe that he did it by phone and that it was fairly straightforward.

Memory failing, but I'm almost positive he started this around May or June and because he initiated it before July 1st, got the rates for that current year. I'll see if I can find papers with dates.

Thanks Nellie. For some reason, I think I have to use the online route (as opposed to the phone). I think phone is express and can only be done if all the loans are direct loans. I have a direct loan, but not all of the loans which I wish to consolidate are direct. I'm getting a headache already!

I found the loan papers. He started it earlier than I thought so disregard what I said. There is one dated mid-March that says: Your loans will be consolidated in 10 days. I don't know how long before that he applied. That also came with a summary sheet showing the loans to consolidate and estimates of payments for standard, extended and graduated payments so that gives you a chance to change it or back out.


Now that you mention it, the on-line thing sounds vaguely familiar. I remember that he had to request his PIN for something -- maybe it was this?

Since consolidating, the variable rates have still been low so it hasn't made a huge difference -- yet. I noticed this by comparing the before and after payment amounts. And the total interest is going up a little because of the continued forebearance. I still think it was a good move though.

Yeah, the pin enables you to look at all your loans so you can size up which ones you'd like to consolidate. And the pin allows you to "sign" promissory notes electronically rather than send everything through the mail.

I sent an e-mail to US Dept of Ed -- asking about locking in rates even if their end of the process takes longer than July 1. I'm thinking I should be able to do that but I'm awaiting their reply.

I'm on the standard repayment plan now and am about halfway through it (e.g. about five years left).

Last year's rate change made my total monthly bill about $40 greater if I remember correctly. I felt like a dolt for not consolidating before that happened.

[Laker]

I almost positive that if you get them your completed application before July 1 you are good for the pre July 1 rates. July 1 is too late.

Both DW and I consolidated our loans last year before July when we both locked in a 2.85% rate which can be reduced by 1.0% for 20 on-time payments and .25% deduction for direct debit. Hers are in deferment and we are just paying on mine until she gets out of residency.

Consolidation has been wonderful to us. My payments were cut in half and will allow us to get by here in S. Florida where it is super expensive until residency is over.

THANK YOU!
Thank you!
THANK YOU!
I am taking care of this right now. I heard about the hike but didn't do anything then, and because of your prodding, I'm handling it immediately. We can't afford to let my loan rates soar while his just sit there.

Edited to add: I have now consolidated my loans. It took me less than 1/2 an hour and will save me some money. Yay!

Edited to add: I have now consolidated my loans. It took me less than 1/2 an hour and will save me some money. Yay!

Wow, I bow down before you. That is insanely fast. Or perhaps I'm extremely slow / cautious? I've got the pin and have done some reading on the dept of ed website and it looks about as bad as taxes. I'm curious, did you do it through the department of educ. or through a private company?

[Vanquisher]

We did ours through a private company that offered extra incentives. It was easy and fast.

Edited to add: I have now consolidated my loans. It took me less than 1/2 an hour and will save me some money. Yay!

Wow, I bow down before you. That is insanely fast. Or perhaps I'm extremely slow / cautious? I've got the pin and have done some reading on the dept of ed website and it looks about as bad as taxes. I'm curious, did you do it through the department of educ. or through a private company?

I had all my paperwork right there together and my PIN was already done (I've worked on the website before), too. I did everything online through the department of education.gov page and signed it electronically. I printed it out afterwards to have a hard copy and it was that easy. All they ask you is the loan information ... lender, address, amount owed, interest rate, etc. It was actually very easy - nothing like taxes (for me, at least) at all!

That's good to hear. Now, that I've got the pin I might just do it this weekend. Also, I'm going to resist the urge to read all the caveats, FAQs, helpful, hints, blah....blah....blah -- I think that's my own issue. I'm very deliberate with financial things. So, reading everything on the site has probably made the task seem bigger than it is.

That's good to hear. Now, that I've got the pin I might just do it this weekend. Also, I'm going to resist the urge to read all the caveats, FAQs, helpful, hints, blah....blah....blah -- I think that's my own issue. I'm very deliberate with financial things. So, reading everything on the site has probably made the task seem bigger than it is.

I read as I "signed" and that was enough for me. I'm deliberate with financial things, too; but I had done some previous research (about 6 months ago) on consolidating, so I was pretty confident on what I was doing. If I had gone through all the links on the site to read things, I would have been really overwhelmed as well though. You're not alone on that. Good luck and it's not that hard!