I Need to Consolidate My Student Loans - The Bills.com Blog

target="_blank">https://www.bills.com/studentloan/loan/, we can have several debt consolidation providers contact you to discuss the options available to you.

In addition to consolidation programs, most student loan lenders offer various programs to graduates struggling to repay their loans. For example, many lenders offer some type of “hardship deferral” allowing borrowers to skip payments for a certain period of time, usually for a few months at a time. In many cases, lenders will allow borrowers to defer their payments several times in a row, providing borrowers with a year or more without payments to help borrowers become financially solvent. In my experience, student loan providers are quite flexible in working with individuals who are struggling to make their payments. However, you must be proactive in communicating your difficulties with your lender, as the lender may be unable to assist you once your loans become delinquent or goes into a default status.

Before you decide to consolidate your loan with another lender, I encourage you to contact Sallie Mae to discuss your financial difficulties and find out what options the lender can offer you to help lower or defer your payments. Then contact consolidation lenders to discuss the interest rates they can offer you on your consolidated loans, and how the rates and terms compare with those on your current loans. You may find that your current loans are actually charging you a comparable or even better rate, depending on when your student loans were taken out; loans taken out more recently tend to charge a lower interest rate than older loans. Newer loans usually also have a fixed interest rate as opposed to those loans made before mid-2006, which generally have an adjustable interest rate. To read more about the current status of consolidation loans, you should visit http://www.smartmoney.com/consumer/index.cfm?story=20080414-sallie-mae. Basically, you need to speak

with various consolidation lenders to determine if the loan terms they can offer you are better than those you have on your current loans.

Given the high interest rates being charged on your student loans (you mention rates between 10% and 15%), these loans may be private student loans rather than the more common federally insured variety. When most people think of “student loans” they generally think of those loans which are insured by the federal Department of Education, and thus are also heavily regulated by federal law. However, many banks and other financial institutions offer students private loans, which are not federally insured, to help them pay education costs which exceed the amount of their federally insured student loans. These private student loans are basically unsecured personal loans; the only difference is that they are generally not dischargeable in bankruptcy. While the assistance offered on to borrowers on federally insured loan is usually more extensive, consolidation programs are available to borrowers who took out private student loans. To read more about consolidating private student loans, you can visit http://www.finaid.org/loans/privateconsolidation.phtml. If you do not remember if your student loans are federally insured or private, you can contact your lenders to inquire about the types of loans you currently owe.

As I mentioned previously, my past experience with student loan providers has shown them to be relatively flexible in assisting borrowers who are struggling to repay their debts. However, you must communicate you difficulties to your lender as soon as possible to prevent you loans from going into default, which can make deferring or consolidating your loans much more difficult. I hope that the information I have provided assists you in resolving your outstanding student loans, and helps you Find. Learn. Save.

Best,
Bill
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