I graduate December 2010. So in 1 1/2 years. I’m praying & hoping that things get better, so my student loan repayment options are better.
I will have $30k in federal & another $30k in private loans. I checked my credit & all accounts are in good standing (not sure of my score). I have a great co-signer (750 credit score & $90k income). This has helped me fall in the middle category in interest rates of private loans.
I want to be able to consolidate my loans after graduation. Still a while away, but better to plan right? I’m consolidating them separately. I was wondering for the private student loan consolidation, with my co-signer, would it be hard to get qualified? Anyone have experiences they want to share? Right now I think only Wells Fargo & Chase are offering private student loan consolidations. Let me know please 
I hope more banks will be able to offer this program again as time goes on.
ylh:
I’m not going to comment specifically on your chances of being approved for a consolidation loan. If your credit is generally good, and your cosigner offers the security that the lenders are looking for, you certainly have a reasonable chance of being approved – but – as I’m sure you know, the lending market is REALLY REALLY tight right now, and many applicants with good credit are being turned away.
What I did want to comment on is the consolidation process in general. I just want to make certain that you recognize that loan consolidation has a “dirty little secret” – and that’s all the extra money that you’ll wind up repaying on your loan.
There is only one technique that consolidation loans can use to lower your monthly payments – and that technique is s-t-r-e-t-c-h-i-n-g your repayment term. You don’t know have to know much about loans to understand what that means – the longer you stretch your repayment, the more interest you pay on your loan.
For the sake of argument, let’s assume that you are hoping to consolidate $30,000 of private loans that will enter a 10-year repayment at 8.9% interest. Right now, you would be looking at 120 payments of $378.41 a month.
Consolidate that $30,000 into a 20-year loan at the same interest rate, and your payment drops to $267.99 a month – a savings of $110.42 a month. I’m sure you could put that extra $110 to good use.
But here’s the catch – over 10 years, your total payments will be – $45,408.36. How’s that compare to 20 years, where your total payments will be $64,318.53?
What’s the privilege of cutting your monthly payment by $110 going to cost you? $19,000.
Wow – that’s the list price on a Honda Civic, a Mini or a Pontiac G5.
Make that same deal on your government loans, and you’re looking at another $15,000 in extra interest. That’s quite a lot to pay.
Before you consider consolidation, take a look at your lender’s other options, including Income Contingent Repayment, extended repayment, graduated repayment, and the brand new Income-Based Repayment. Do the math, and see which of these might make the most sense for you.
Don’t be in a hurry to consolidate – that’s just one of several options available to you, and it will prove to be a very costly one.
Good luck to you – graduation’s not far away!
Left by NotAnyoneYouKnow on April 5th, 2010