Should I consolidate my federal student loans?
Asked by SoniaI have undergraduate and graduate loans with interest rates over 8.02%. The amount of the loans are also significant. I know I missed the deadline for the rates at the end of June. But should I consolidate at this time? I am having a difficult time finding permanent employemnt also. Are there deferments/forbearrances with consolidation? Also, which are the best consolidation loan bearers (hope that's the correct term) to choose.? Thanks all for any assistance provided.
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Answered by Daniel
you should consolidate your loans. the interest rate actually gets rounded up to the nearest 1/8th of a % then becomes a fixed rate. if all your loans are at the 8.02, your new rate would be 8.125% as far as reducing the rate, you can do that with incentives. some companies offer better incentives then others, but can sell your loans and you lose the incentives if that happens. your monthly payments would be greatly reduced, because the term gets extended based off your loan amount, whereas right now you are on a 10-year term. that may be why your payments are high. as far as deferments, you only accrue interest on your UNSUBSIDIZED portions. every company has to offer them as it is regulated by the government (but it is up to them to offer forbearances, which you accrue interest on everything, but your payments are postponed). you may want to ask your current lender for an "economic hardship deferment". to be eligible, take your current monthly payment from your student loans (just your federal, this would not include your private loans if you have any), then multiply it by 5. if the result of that is more than you make before taxes monthly, you are eligible for the deferment. also, if you work less than 30 hours per week, but are actively seeking employment in any field, that would qualify you for the unemployment deferment- where your subsidized interest does not accrue. the forbearance is there if you dont meet those requirements, but still need to postpone your payments. if you have more questions, feel free to message me, this is what i do. good luck either way!
you should consolidate your loans. the interest rate actually gets rounded up to the nearest 1/8th of a % then becomes a fixed rate. if all your loans are at the 8.02, your new rate would be 8.125% as far as reducing the rate, you can do that with incentives. some companies offer better incentives then others, but can sell your loans and you lose the incentives if that happens. your monthly payments would be greatly reduced, because the term gets extended based off your loan amount, whereas right now you are on a 10-year term. that may be why your payments are high. as far as deferments, you only accrue interest on your UNSUBSIDIZED portions. every company has to offer them as it is regulated by the government (but it is up to them to offer forbearances, which you accrue interest on everything, but your payments are postponed). you may want to ask your current lender for an "economic hardship deferment". to be eligible, take your current monthly payment from your student loans (just your federal, this would not include your private loans if you have any), then multiply it by 5. if the result of that is more than you make before taxes monthly, you are eligible for the deferment. also, if you work less than 30 hours per week, but are actively seeking employment in any field, that would qualify you for the unemployment deferment- where your subsidized interest does not accrue. the forbearance is there if you dont meet those requirements, but still need to postpone your payments. if you have more questions, feel free to message me, this is what i do. good luck either way!
