ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Consolidate Student Loans

Updated on July 7, 2013

Making decisions about student loans, like most debts, is a complex issue. There are many factors to be aware of when considering if it is in your best interest to consolidate student loans. Here are some of the factors:

  1. What are the terms of your current student loans?
  2. Are your loans federal loans or private loans?
  3. Are you a still a full time student?
  4. Are you a part time student or in your grace period?
  5. Do you have any other debts?
  6. What are the terms of your other debts?
  7. What is your current income?

What else do I need to know? Interest on federal loans is tax deductible, while interest on private loans is not. The interest rate on a federal loan is usually lower than on a private loan. Because of the advantages that federal loans offer, It is not recommended that you consolidate federal loans with private loans.

By consolidating private loans you will have a single monthly payment, and that may be appealing to you. You also may be able to secure a lower interest rate, if your credit score has improved, or if today's interest rates are lower. Remember that interest rates are set by the lending institution, and sometimes, extra fees apply. It is a good idea to shop around for the best rates. In addition, as with any regular loan, you will be resetting the interest clock. Consolidating your loans may give you a smaller monthly payment, but it will increase the overall interest you pay when all is said and done. If you've already paid a substantial amount on your balance, this is a factor really worth evaluating. Just like refinancing a home mortgage, the interest is front loaded and the biggest slice of each payment you make for many years will be interest.

Although you can send extra money towards principal on your consolidated student loan, let's look at one possible scenario. Let's say you also have credit card debt and you are being charged a higher interest rate than on your consolidated loan. Where are you best served to send an extra payment? To your student loan, which is primarily interest at this point, or to your credit card, which has a higher interest rate?

What's the best way to make an evaluation? Because everyone's situation is different, there is not a one size fits all answer. Sometimes we make decisions about what we think our best financial path might be, and these decisions may actually be based in our emotions. For example, let's say you decide you want fewer, lower payments. What will you do with the money you save on the lowered payments? If you truly need the extra dollars just to make ends meet, that might be a wise decision. But if the extra dollars will just disappear in the general flow of consumerism, you may want to take a deeper look at your motivation.

There are new options today that enable you to make mathemathically based decisions as to which direction may actually be the best choice for your situation when facing an important quandry such as whether to consolidate student loans.

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      martinnitsim 

      6 years ago

      hi there trevor if you are still in need of them this is the contact

      and details, they have a wealth of knowledge ,say martin put you on

    • Jody Heckenlively profile imageAUTHOR

      Jody Heckenlively 

      9 years ago

      Great idea! That would allow them to live a life of integrity and save huge amounts of interest at the same time!

    • Joseph Thomas profile image

      Joseph Thomas 

      9 years ago

      Jody, great information. I'm going to send this to some of my college life timers who don't plan to pay off their loans off.

    • Jody Heckenlively profile imageAUTHOR

      Jody Heckenlively 

      9 years ago

      You are correct, Jennifer! It is time to get the word out!

    • Jennifer Hartman profile image

      Jennifer Hartman 

      9 years ago from Iowa

      Thanks Jody....if I only new about this 10 years ago!

    • Jody Heckenlively profile imageAUTHOR

      Jody Heckenlively 

      9 years ago

      Thanks for your comments. It really is amazing to dig deeper into this complex issue. I'm sure many students consolidate once they receive a solicitation from their lending institution, without really looking at the whole picture.

    • Amy Boyack profile image

      Amy Boyack 

      9 years ago from Idaho

      Jody,

      You are always so full of good information. I was just thinking about student loans the other day. It's one of those things that keep haunting you. It's good to get the word out about the new solutions available.

    • James Oates III profile image

      James Oates III 

      9 years ago from Southern California

      Hi Jody, a very nice piece...well done.

      warmly,

      Jim

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)