Ready to Consolidate Your Student Loans? Here Are Some Tips To Follow

Hooray! You graduated. Your interviewing went well and you are starting your first real job. Now you will have to start paying back those student loans.

Should you consolidate? Probably. Here are some tips to help you do it right.

Hopefully you were able to qualify for more free financial aid (scholarships and grants) and less student loans in the process. If you were careful to keep education expenses down by using multiple cost reduction strategies, you probably have less student loan debt than the average graduate which is currently about $24,000. If so... congratulations. You have effectively planned and will start your new career on a positive path.

Here are some issues to consider when looking at consolidating your student loans. Every student's situation is different, so make sure that you weigh each option in light of your own personal financial strengths and weaknesses.

Consolidation Benefits And Tips:

1. One Payment Versus Multiple: One of the best features of a student loan consolidation is that you will be able to make only one monthly payment for the remainder of your loan. If you took multiple student loans over the years, possibly from different lenders and with different interest rates, a consolidation will streamline your loans and average your interest rate into one payment.

2. Negotiate Your Terms: Based on your loan balances, current income, job stability and future advancement potential, you can arrange to pay your loan back over a shorter or longer period of time. When your loans are reviewed for consolidation, ask if there are any incentives or rebates for consolidating. If you have a small balance on a higher interest rate loan, consider keeping this separate and paying it off first which will enable you to lower your other loan rates upon consolidation.

3. Auto Debit Program: Many lenders will offer a.25% to.50% interest rate reduction if you elect to have your loan payments automatically deducted from your checking, savings or brokerage account. If they don't offer it up front, be sure to ask about it and fill out the necessary forms to get your discount.

4.On Time Rate Reductions: Some lenders will also offer a.50% to 1.00% rate reduction after you have successfully paid 36 months of on time payments. If you use the auto-debit program, this should be easy to accomplish. But if not, make sure that you pay every payment on time or early. If you are even one day late for one payment, your entire 36 month period could start all over.

5. Private Versus Federal Loans: If you were forced to take private student loans in addition to your federal loans, you may want to keep them separate. Private loans have less government oversight than your federal student loans, so if you blend them together upon consolidation, you are now bound by the stricter federal guidelines on the entire new loan. This may be detrimental if you run into a financial hardship in the future.

Summary:

Student loans are becoming a larger part of life for most college graduates these days. As education costs continue to rise and financial aid continues to shrink, making smart decisions during college and after graduation can save you hundreds, even thousands of dollars. Consolidating student loans can make your life, record keeping and finances easier to maintain. Once you have a steady income, make the move, you'll be glad you did.

If you would like to discover more strategies specifically designed to help maximize financial aid and reduce the high costs associated with college, you can download your FREE College Cost Savings Kit by clicking here. Download, print and share it with your friends or family. I'm confident it will help you to find new ways to save and get the most out of your college education... and do it all for less.

About the Author:

Keith Maderer is a financial expert and father of five. He has been a financial adviser in the Western New York for over 30 years. He is the owner of SENIOR Financial and Tax Associates and is the founder of the Maderer Foundation, a private scholarship program for area youth since 2006.

Keith is the author of "How To Get Your College Education For Less". Available on Amazon.com - ISBN No: 978-1-4538-2053-7. This book is filled with practical strategies you can use right now to save money on college.

You can get your FREE College Cost Savings Kit, or check out his blog by visiting http://www.collegeeducationforless.com/