Even though I’m still in school, I’ve decided to consolidate my student loans. Why you ask? Well actually it wasn’t by choice, I happened to drop below half-time status last semester, so my grace period kicked into gear. I decided to slow down on my graduate program since my home life was suffering a little. So while dropping to half-time wasn’t a great financial decision (since I lose the ability to defer payments on all of my student loans), it was a decision that I had to make for my family’s sake.
I had one unsubsidized federal Stafford loan left over from my undergraduate degree with about $7000 at a 6.970% rate. Plus, I had a total of about $18,000 from my graduate program at rates between 6.62% and 6.8%. I could’ve gotten a much better consolidation rate had I decided to not include my undergraduate loans in the application, but I decided that the convenience of having them all in one was worth it to me. I also decided to use my primary bank as my consolidation lender, that way I’ll see my student loan balance (and payments due) whenever I log into my primary banking account online. Since I do this at least once a day, it works well for me.
While the rates today aren’t as good as they were a few years ago, consolidating still makes good sense in that it allows you make one payment instead of having to keep track of multiple loan accounts and make multiple payments each month. Consolidating those payments makes it less likely you’ll miss a payment, helping you keep your credit strong. You also have more repayment options if you consolidate, making it sometimes more flexible for your financial situation. If you’re able to get your primary bank to be your consolidation lender, then even better. Look at what incentives they have for lowering your rate, and make sure to take advantage of them.
