Student Consolidation Loan Checklist

Student Consolidation Loan Checklist

If you​ are graduating college soon,​ now is​ the​ time to​ begin preparations for your student consolidation loan. you​ have a​ six month grace period after graduation before payments begin,​ but the​ consolidation loan application process can take several weeks,​ especially if​ you​ haven't gathered all your loan information and decided on​ a​ lender.

Inventory your student loans. Make a​ list of​ all your loans,​ including type of​ loan,​ lender,​ the​ amount of​ your loans,​ interest rates and the​ amount of​ your payments. Review your loan documents,​ contact your lenders or​ loan servicers or​ go to​ the​ National Student Loan Data System (NSLDS) website. if​ you​ don't know your PIN (Personal Identification Number) to​ log in,​ you​ will have to​ request a​ new one and it​ will be mailed to​ you. Expect to​ wait a​ week or​ two for the​ PIN to​ arrive,​ so best to​ get it​ done early.

Calculate Your Current Monthly Payments. if​ you​ are already in​ a​ repayment status,​ you​ will know your exact monthly payments. However if​ you​ are still in​ school or​ in​ your grace period,​ you​ should estimate your monthly non-consolidated loan payment based on​ the​ current interest rates and your loan balance. you​ can also check your estimated payment amounts by contacting your lenders or​ loan servicers.

Budget? What's a​ Budget? Though many people wander through life from paycheck to​ paycheck without knowing where their money is​ going,​ you​ really need to​ set up a​ budget to​ see if​ student loan consolidation is​ for you. Once you​ have that first job,​ determine a​ reasonable amount of​ your income that can be allocated to​ your student loan payments. This percentage should be based on​ a​ realistic budget. Then see if​ the​ estimated loan payment amounts you​ calculated above will fit into your budget.

If your estimated or​ actual payment exceeds that monthly budgeted amount,​ reevaluate your income and outflow. Can you​ trim any areas of​ your budget? Can you​ increase your income?

If it's a​ short term issue (expected raise in​ pay,​ getting a​ part time job,​ etc.),​ consider your deferment or​ forbearance options.

However,​ if​ there is​ no light at​ the​ end of​ the​ tunnel,​ it​ is​ time to​ consider consolidating your student loans.

Select loans for consolidation. Determine which of​ your loans are eligible for federal consolidation. a​ listing of​ the​ loans that can be consolidated in​ addition to​ Stafford and Perkins can be found at​ Eligible Consolidation Loans.

Private student loans are not eligible to​ be consolidated through the​ Federal consolidation programs.

You might lose some discharge (cancellation) benefits or​ deferment benefits if​ you​ include certain types of​ loans in​ your consolidation loan like Federal Perkins Loans,​ for example. you​ can contact the​ holders of​ your loans to​ find out what the​ impact of​ consolidation will be on​ your current benefits.

Consolidate Your Loans. Try going through the​ Federal Direct Loan Consolidation Program. you​ can make the​ application online.

If you​ have graduated,​ but are still in​ the​ grace period,​ start the​ consolidation process approximately two months before the​ end of​ the​ grace period. This will allow enough time to​ have your consolidation loan processed before the​ grace period expires,​ yet not so early that you​ lose too much of​ your grace period if​ you​ have a​ FFEL consolidation loan. (If you​ consolidate FFEL loans during the​ grace period,​ you​ will give up whatever portion of​ your grace period remains. you​ retain all of​ your grace period,​ however,​ if​ you​ get a​ Direct Consolidation Loan.) Some FFEL lenders offer to​ hold disbursement of​ consolidation loans until the​ end of​ the​ grace period to​ enable borrowers to​ minimize their interest rate and maximize their grace period. Check with your lender to​ be certain.

Keep in​ mind that if​ you​ consolidate during your grace period,​ you​ can lock in​ an​ interest rate at​ least a​ half percent lower than the​ current repayment rate. Many lenders will give you​ a​ discounted rate if​ you​ sign up for electronic payment and also for making a​ certain number (usually 36) of​ on-time payments.

When filling out the​ consolidation application,​ make sure you​ provide complete and correct address information,​ include two references,​ and sign the​ promissory note. Miss any of​ these and you​ will delay the​ processing of​ your application.

If you​ are already in​ repayment,​ continue making payments on​ your loans until consolidation is​ completed. if​ you​ need immediate payment relief,​ request deferment or​ forbearance

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