Fed Financial

Should I consolidate my private student loans before the June 31st interest rate deadline?

I know that the Federal interest rates will be going up to 7.25%, but are the private rates expected to follow suit? Also, is it possible to consolidate federal loans together with private loans in a private loan consolidation loan?

Public Comments

1. You need to call your loan company to find out what the deal is with the varying interest rates. On the surface it sounds ideal. As for both loans, you'll need to have good credit or home equity to qualify for a personal loan to cover debts. It is a good idea if the length and interest rate arent too high.
2. Depending on the interest rate you are currently paying this may be a good idea. You will have to research this based on your personal account information.
3. yes
4. Only consolidate if you have over 10k in loans, otherwise it's really not a big $$ savings. If you want to lock in your rate, it locks your loan in, and you can't move it to another lender.
5. You cannot consolidate private loans with federal loans. Even though they were for school. (I found that out the hard way) The interest rates will always go up. It is always a good idea to lock into an interest rate if it is reasonable and if rates are expected to rise.
6. It is the prime rate that is increasing. Most student loans are based on prime rate plus a % determined by your credit score. If you have lower rates then yes you should. The only thing you need to know is this. With all student loans you have a grace period once you are no longer in school before you have to start making payments. This grace period is usually 6 months. When you consolidate your loans you will lose this grace period. If you are no longer in school you would benefit from this. If you are still in school you might want to consider t. You need to ask your lender if they offer forbearance periods or other grace periods if you consolidate and lose the original one.