Is there any benefit to not consolidating student loans?
Asked by EvilFairiesI graduated from college two years ago, and never consolidated my student loans. I believed (possibly wrongly) that consolidating was only important if I wanted to lower my monthly rates but it wouldn't have made a difference in the total cost of my student loan. My plan was to pay off large chunks of the loan and to have it paid off quickly. Would consolidating have made a difference in my loans, and will it make a difference now even though I've been paying the loans back for two years already?
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Answered by Sallie Mae
There's a lot of hype out there about consolidation, most of it from companies anxious to get hold of your loan volume. The fact is, consolidation isn't the right option for every student, particularly if they're not having trouble meeting their monthly payment, as you seem to be doing. Best thing to do is call your lender, have them run your numbers, and see if there is a benefit to you by consolidating. Rates have increased since you graduated, so you may actually be better off if you don't consolidate. Most lenders can also include your separate loans on one bill, so if that would make things easier for you, you can ask them about that as well. Bottom line, you're doing a smart thing by paying off more than the minimum monthly payment - this will help you pay less interest over the life of your loan and set you on the way to financial health.
There's a lot of hype out there about consolidation, most of it from companies anxious to get hold of your loan volume. The fact is, consolidation isn't the right option for every student, particularly if they're not having trouble meeting their monthly payment, as you seem to be doing. Best thing to do is call your lender, have them run your numbers, and see if there is a benefit to you by consolidating. Rates have increased since you graduated, so you may actually be better off if you don't consolidate. Most lenders can also include your separate loans on one bill, so if that would make things easier for you, you can ask them about that as well. Bottom line, you're doing a smart thing by paying off more than the minimum monthly payment - this will help you pay less interest over the life of your loan and set you on the way to financial health.
