Student Loan Consolidation is a wonderful option for restoring financial health for students and parents who have taken loans from various sources to fund the academic years of students. If you want to consolidate multiple student loans that you have taken, you will like to do everything to qualify for the best interest rates. It can help you save a lot of money over the entire loan duration. Here are some tips to help you get the best rates.
Get the credit reports
You should obtain your credit reports from the 3 major credit bureaus that matter – namely, Equifax, Trans Union and Experian. You can do this online for a competitive fee. Your credit score will partially determine your consolidation rates for student loans.
Consider the weighted rate
You will also have to check the weighted average the interest on all the student loans that are present in your name at the moment. The calculation will offer you a rate, and you have to look for more competitive rates while comparing across lenders. There are many online calculators easily available for loan rate calculations. It is essential to calculate your weighted rate to obtain a consolidated student loan at the lowest rate possible.
Gauge your own eligibility
It is wise to determine your own eligibility before you opt for student loan consolidation. If you have many private student loans in your name, you will need to approach a single private consolidation lender to consolidate all your loans. The calculation of your interest rate will be based on factors such as your credit rating (FICO) that will determine an additional spread, your existing prime rate or some other standard index.
Research and compare lenders
You should conduct an online search to gather the names of various lenders specializing in student consolidations loan. Never be guided to limit your search to only a few lending organizations. The more number of lenders you compare, the better will be your chances to bag a good deal. Keep a log of your research, with the names, contact details, rates, website quality and your feelings about the lender in an Excel sheet. Once you have done this, send an application to each of them.
Know about the interest rates
Keep in mind that the rates of interest for student consolidation loans vary across lenders, and you have to analyze them properly. Based on how long you wish to have your repayment period, the calculations will involve how much you would be paying in entirety. You will need to make a lower total payment with a lower interest rate. Some lenders offer additional benefits, such as extra bonuses in case you make payments on time each month or opt for auto withdrawal of payment from your checking or savings account. Even small discounts and rebates such as these can be very useful for you in saving a few dollars while you are trying to pay off your loans. It will be in your best interests to look for such type of a lending orga