Having a lot of student loans can feel like a burden. After all, life has enough expenses for most of us to deal with: just to get by month to month, we have to pay for housing, food, medical bills, and transportation.
One way to potentially reduce your monthly student loan payments is to find a student loan consolidation company and consolidate your student loan debt. This is ideal if you have more than one student loan. By consolidating, you can reduce your monthly payments by potentially lowering your interest rate and stretching out your payments over more time.
Student Loan Consolidation: Federal Or Private?
The first decision you will need to make is whether you should consolidate with a private lender or with a federal consolidation program. The decision is an easy one to make, once you know how it works.
Basically, you should consolidate with a private lender if your existing loans are private loans.
Private Consolidation: How Lenders Determine Your Interest Rate
When it comes to private loan consolidation, it is important to understand how your interest rate is determined. Essentially, it is a combination of two factors: 1. the current standard rate such as the prime rate (or LIBOR) rate, and 2. your credit score.
How To Find The Right Student Loan Consolidation Company
Here are 3 tips for getting the lowest rate on your private consolidation loan:
1. Make a list of at least 5-7 consolidation companies: As with dating, looking for a job, car shopping, and pretty much anything else in life where choice is involved, more choices are always better when you are starting out. Of course, at some point you will need to reduce your choices down to a reasonable number. But, start with as large a set of companies as possible.
2. Narrow your list down to 3 companies:Do online research on the companies you have found. Look at factors such as how long they have been in the student loan consolidation business, any low advertised rates they show, and the terms and conditions of their loans. Also, pay attention to whether the company feels like one you would want to do business with.
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