The decision to use a student loan consolidation company is a big step to lowering your payments.Now that you have graduated and have the job that you wanted, it’s time to pay back those student loans. Life isn’t easy for graduates with the rising costs of housing, food and transportation. So even if you have the income that you wanted, you still have to cut corners occasionally. By going to a student loan consolidation company your monthly payments will be lowered considerably. The interest rates are lower and some companies will even let you stretch your payments out.
The first decision in the consolidation process is to decide whether you want to go with a federal consolidation or private consolidation. Once everything is explained, the decision is a fairly easy one to make. You should only go with a private loan consolidation company if your student loans are private ones. If you have federal student loans, you should go to a federal loan consolidation company. For private loan consolidation, you should learn how your interest rate is determined. 2 factors come in to play on this. First is your (LIBOR) rate and second is your actual credit score. The credit rate will determine the margin that is place on top of the prime rate.
You usually get a set, or fixed, rate, but you do have flexibility on your loan terms. However you need to choose theloan consolidation company that gives you the lowest rates. Choose a consolidation company the same way you would shop for a car. You should make a list of at least 5 student loan consolidation companies. Then you will need to narrow down this list even more, eventually picking one company. Do as much research online as possible and find out how long they have been in business. If a business such as a loan consolidation company is honest, it will not refuse to show you their credentials. If they refuse, then cross them off your list. Also find out the terms and conditions that they offer on loan consolidations. In addition, make sure that there are no charges for early repayment on the loans.
Next, fill out applications for the companies that are still on your list. Don’t take the first offer presented though. Get quotes from all of those that respond to your applications and compare the offers made. Make sure the student loan consolidation company that you do decide to sign up with has a good track record. By doing an indepth search and detailed research you can find a good loan consolidation company. It takes a little time, but it will save you money. The good thing is that once you have all of your student loans paid off, you will have a much better credit score. A high credit score is priceless these days. Most student loan consolidation companies don’t do credit checks, but if they do one make sure there is no charge for this as it is usually free.