Consolidate Student Loans For Lowest Rates

Nearly two-thirds of undergraduate students will have some kind of debt when they graduate from college. According to the 2003 -- 2004 National Postsecondary Student Aid Study (NPSAS), the average student loan debt among graduating seniors was $19,202 (including Stafford and Perkins Loans). That's a hefty debt load to carry before you've even kicked off your career. Are you interested in lowering your interest rates on your student loans?

Would you like lower monthly student loan payments?
Do you have multiple student loans that require you to make multiple payments every month? Wouldn't you rather just make one payment every month? If you said yes to these questions, you might want to consider consolidating your federal student loans. Many lenders offer loan consolidation programs, with incentives that can save you money and lower your interest rates.

What Loans Are Eligible?
Only certain types of loans can be consolidated. These include:

• Auxiliary Loan to Assist Students (ALAS)
• Federal Direct Loan (subsidized and unsubsidized)
• Federal Parent Loans for Undergraduate Students (PLUS)
• Federal Perkins Loan
• Federal Stafford Loan (subsidized and unsubsidized)
• Federal Supplemental Loan for Students (SLS)
• Federally Insured Student Loan (FISL)
• Health Education Assistance Loan (HEAL)
• Health Professions Student Loan (HPSL)
• Loan for Disadvantaged Students (LDS)
• National Direct Student Loan (NDSL)
• Nursing Student Loan (NSL)

However, you should note that some of these loans may already have low, fixed interest rates. If you have a Perkins Loan, an HPSL, NDSL or NSL, for example, you should be careful about consolidating your loans, as doing so might actually increase your rates.

What Are the Deadlines?
The Federal Consolidation Loan program does not have deadlines, but bear in mind that the loan must be fully disbursed to be eligible. Also, the loans must be either in a grace period or in repayment. If you put off funding your Federal Consolidation Loan, more and more interest will build up on your unsubsidized loans. And if your loans are in repayment already, you might be able to benefit from consolidation by fixing your interest rate while it's still low.

How Does It Work?
When you consolidate your student loans, the various balances remaining on your loans get paid off. The total balance from all of the loans rolls into a single, consolidated loan, which offers you a fixed rate. You get to make one payment every month on your educational debt, instead of keeping track of many. Ultimately, you get to streamline your student loan bills, which will lower your payments and make it easier to keep track of everything. Just be sure to read the fine print to make sure you're really getting the best deal.

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