Loan Consolidation Time again

One of the best things about being finished w/law school is facing all my debt.


But face it I must. Interest rates are going up again July 1 so if you’ve got student loans you might want to consolidate. Of course, if you have student loans, I’m sure your lender has made sure you know all about consolidation—perhaps much more than you ever wanted to know. ((Access Group must have called me a dozen times in the last couple of month before I finally told them that if they called me one more time I would go elsewhere to consolidate. They haven’t called since.)) However, in doing my own second consolidation I’ve learned a couple of interesting bits of new info, including:

  1. Private loans have 9 month grace period from date of graduation. You should get a letter 45 days before repayment begins. That letter will tell you when payments are due and allow you to choose your payment plan.
  2. Make sure your lender has your correct address for that 45-day letter! You never want to miss any payments or pay late, obviously, but being late in the first couple years can have even worse consequences than you think. I think. ((Can anyone verify this? I remember something like this from my loan exit info session, but, of course, I didn’t write it down. I remember learning something like if you make all your payments on time in the first three years (or something like that) the lender must (by law) reduce your interest rate by some amount—like a half or quarter percentage point. Does anything like this ring a bell w/anyone? This came in the part of the lecture where the “expert” said that the most common payment to miss or be late on is the first one and that it’s our responsibility to know what’s due and when b/c the lender wins if we ever mess up. Please please comment if you know anything about this b/c, while I’m planning on paying everything on time, I still want to know I’m not remembering things that didn’t happen.))
  3. If you’d like to learn a bit about your loans you might want to with the Student Loan People. Once you login there you should be able to get a list of all your loans, including details about amount you owe, interest rate, and whether the loan is in repayment or deferred, and when your next payment is due. Try the NSLDS for info about your federal loans only.
  4. Judging by the change in my loan amounts from yesterday to today, it looks like I’m paying at least $10/day in interest. That amount will only grow until I start repayment…
  5. The loan consolidation interest rate a year ago was 2.7%; the current consolidation rate (before July 1, 2006) should be 4.7%.
  6. If you consolidated any federal loans last year and you graduate(d) this spring, those loans will go into repayment about a month after you graduate. If you don’t have a job (like me) and you’d like to defer repayment until you do, check w/your loan servicer to get an Economic Hardship Deferment Request.

As interesting as all that is, I’m still not sure what to do about consolidation this time around. Since my last consolidation I’ve borrowed another $18,500 in federal loans I could now consolidate. Those loans have an interest rate of 5.3%. If I consolidated them, they’d only be at 4.7% (but probably a couple tenths more b/c I probably won’t get the lowest available rate). So is it even worth my while?

Loans. So not cool. [tags]debt, loans[/tags]