Most of us are familiar with student consolidation loans as a means to handle
student loan debt. Quite simply, a new repayment plan is created allowing for a
longer term with a smaller monthly payment. They are provided by various private
lenders as well as the federal government. When choosing a student consolidation
loan, or after you have decided, there are many actions that you can avoid to
ensure that you consolidation loan works as it should.
First of all, do not give in to the numerous scams that are looming around the
United States and other countries. The majority of these scams are conducted
over the phone. Suspicious phone calls requesting your social security number or
other personal information should be avoided. Quite simply, if you receive a
call from an unfamiliar or unknown number, do not give them any personal
information. Today, identity theft is being used more to acquire fraudulent
student loans under another person’s name. The results can be devastating and
can have both short term and long term effects. Other student consolidation loan
scams use the internet to prey on their unsuspected victims. Write down the
information, report it, and then delete the email. As you probably notice, most
scams are conducted in a way that does not require you to meet directly with the
lender.
If you choose to consolidate all of your student loans, be sure to make you
payments on time. Do not wait a couple days, or even weeks later to make a
payment. Besides, you have chosen a consolidation loan to lower your monthly
payment. Therefore, making the monthly payment should be that much easier.
Consider your student consolidation loan payment as any other payment that you
consider with high regards. If it helps, post a calendar or reminder where you
are most likely to see it when payment time rolls around. Also, your loan
provider may allow payments to be made automatically; similar to the bill pay
service that is used with credit cards and monthly bills.
In the majority of situations, it is wise to avoid consolidation of Federal
Perkins Loans. Federal Perkins Loans provide a 5 percent fixed rate.
Consolidation will most likely result in a higher interest rate. Therefore,
making your normal monthly payment on your Perkins loan may be the best idea.
Avoid consolidation of your student loans if you are eligible for one of the
many cancellations features offered by many federal student loans. Some federal
student loans allow eligible borrowers to wipe out their loan completely.
Consolidating under these circumstances would be pointless and cost you
unnecessary payments.
Needless to say, it may help to speak with someone that has experience handling
student consolidation loans before any decision are made. You never know, one of
your good friends may have had to handle a similar situation and can give some
friendly advice. Overall, consolidating your student loans may be very
beneficial, however, it is necessary to avoid certain actions that may result in
poorer results.
Student Loan Consolidation: DO NOT DO!