For many recent college grads, paying back your student loans may be the last thing you want to think about, however the reality is, those student loan payments are going to start rolling in shortly. One option that many college graduates turn to in order to lower their monthly student loan payments is student loan consolidation. Once you have decided that student loan consolidation is the right move for you, here are 3 Tips for Student Loan Consolidation that you are going to want to remember:
1. Understand Your Student Loan Grace Period
A 6 month grace period is allocated to almost every type of student loan after graduation, allowing you a “buffer period” before student loan payments kick in to find work. However, in-school consolidations are something you may want to look into, you will wave your 6 month grace period, but consolidating before your six-month grace period runs out could get you a lower consolidation interest rate.
2. Do Your Consolidation Loan Rate Research
If interest rates are high for the current year, there may be less incentive to consolidate your student loans. However, if you still find student loan consolidation the right move for you, do not be afraid to let lenders compete for your business, you will want to do some comparison shopping to make sure you are getting the best deal. Lastly, before you make the move, check the terms of your current lenders student loans. Some lenders have stipulations which will require you to repay any discounts if you switch lenders, this could be a problem, and may make consolidating not worth it for you after all.
3. Keep Your Private Student Loans Separate From Federal Student Loans
Never consolidate your federal student loans into a private consolidation loan. You will never get the rates and terms via a private consolidation loan that you would be able to receive with a federal consolidation loan. If you have both private student loans and federal student loans you need to consolidate these separately. You can not consolidate private student loans into a federal student loan.