Post # 1
Hey U.S. bees, I’ll be graduating from graduate school in a year, and I just wanted to ask about your general experiences with loan consolidation. It’s confusing because I know I can only do this once and there are multiple options. I’m getting my doctorate (PsyD), so I’m really concerned about doing this the right way!
I do know that some people lost a lower interest rate on some of their loans by packaging them with all of their other loans. Is it possible to keep “out” some of my loans with better interest rates? Or do I automatically have to put all of them in?<br /><br />Also, there are now several possible loan repayment plans. There are several that are based on your income — and a few indicate that you have to demonstrate “partial financial hardship” — but fail to identify what that means? <br /><br />I have made an appointment with my university’s financial aid office to review all of this, I just wondered if anyone had experience with it and had any insight, words of wisdom, etc.
Post # 2
MrsEdamame: Consolidating your loans really doesn’t lower the cost. It’s more of a convenience than anything else. When they consolidate, they take the weighted average of all your interest rates, so there’s no saving or loss. I opted not to consolidate so I could make larger paments on my higher interest loans, which will save me money long term. If you’re not planning to pay more than the minimum, it really doesn’t matter.
Post # 3
GrannyPantiesRock: I may wait to make a decision until I get my first job. I like the income-based repayment options, to make sure my payments are manageable (in relation to my income). My first job right out of school could pay anywhere from 40K-70K, and if it was toward the higher end I would opt not to consolidate.
Post # 4
GrannyPantiesRock: I too opted not to consolidate so I could pay down the higher interest rate loans faster.
OP, it could actually cost more because of “fees” to consoldiate. Did you take all your loans out through one provider? If so, no need to consolidate because when you log in all your loans will pull up on the same screen.
Post # 5
bmo88: Good point. 85% of my loans are federal loans — which qualifies for the income-based repayment plans. The remaining amount is split between two private loans from undergrad, which I could probably pay off within a few years of graduation if I really focused my energy on them.
Post # 6
I also did not consolidate. It would have made my resulting payment be higher than the sum of the individual payments by themselves as they are. Plus I can pay towards the higher interest loans more aggressively. I have income based setup right now and my first job after graduating was 50k. I wish there was some sort of advisor to go to that would help strategize, but I haven’t found anyone who will advise about loans not from their institution, and I started out with 5 different lenders. Best of luck.
Post # 7
MrsEdamame: I consolidated all of my loans after undergrad. They asked which ones I wanted to put in consolidation and I opted for all because I wanted one payment instead of several. As another bee mentioned, the interest rate is averaged and I didn’t end up losing money. I still would have consolidated if the difference was only a few dollars more than the sum because I like the convenience. I’m in a master’s program now and will be going into a PhD program when I finish. In the end, I will consolidate again either all into one or just my grad loans so I’ll have two payments vs several. I definitely plan to do the income based repayment plan so that I have a lower obligation but will pay as much as I can afford toward the principals to pay it off faster.