Use this thread to report on, and discuss, the best loan consolidation deals.
You can find succinct rate and term information in the quick summary (just below this post -- set your rating filter to average).
Note that this thread is for loan consolidation, not original loans (i.e., for your upcoming semester).
Many people don't understand how amortization works. Please play with this if you would like to learn. (hint: you can't "pay more towards interest" -- the monthly interest charge is simply calculated by the interest rate).
Feel free to update the summary below. Please note that some incentives are for a lender's consolidation loans and some incentives are for loans that are originated with that lender. Please collect incentives/promotions/discounts for consolidation loans only here.
Some other good general info from the previous (now archived) thread on consolidation deals:
FAQ Q: What are the benefits of consolidation? A: 1) lenders offer incentives for consolidating loans with them as listed above. 2) consolidation loan interest rates are fixed at the rounded weighted avg of your variable rate loans. Good to lock in the low rate loans before they increase in July. 3) at the time of consolidation it's possible to choose new(longer) repayment plan which will reduce monthly payments and allow you to take advantage of low student loan interest rates. (make smaller payments on SL and use the money to pay off higher rate loans)
Q: Is consolidating your student loan the same thing as refinancing? A: sort of, but not quite - you can refinance any (one) mortgage; for student loan consolidation often more than one loan required. - when you refinance you can get current lowest rate, when you consolidate student loans the rate stays the same (it's the avg of all yr loans) but you may be offered a rate reduction or other incentive. - when you refinance you may have to pay a closing cost, when you consolidate student loans you don't pay anything. - you can refinance as many times as you like, but in many cases you can't consolidate loan second time unless you have another SL. - you can refinance with the same company several times, but you can't consolidate several times with the same loan provider.
Disclaimer: Info in this post is collected from sources on this board by generous people who share the information they collect. The information may be out of date or otherwise not accurate (although subsequent posts tend to correct any errors and I will try to update this first post).
Request for info: if you had some negative experience with any of the student lenders please post your story here so the others can avoid the problem.
Please post links and specifics to any other good loan consolidation programs here and see the other threads (like the one below) for more general loan consolidation strategies.
(A warm welcome to the readers of the Student loan forum at creditboards.com who might find this information useful.
If you are having a problem with your federal student loan, contact the FSA Ombudsman at the US Department of Education. The FSA Ombudsman is dedicated to helping students resolve disputes and other problems with federal student loans. The FSA Ombudsman will research your problem in an impartial and objective manner and will try to develop a fair solution. The FSA Ombudsman does not have the authority to impose a solution. Nevertheless, many students have found the FSA Ombudsman to be helpful in resolving disputes with lenders. You can contact the FSA Ombudsman by phone at 1-877-557-2575 or 1-202-377-3800, by fax at 1-202-275-0549, by mail at U.S. Department of Education, FSA Ombudsman, 830 First Street, NE, Fourth Floor, Washington, DC 20202-5144, or by email at fsaombudsmanoffice@ed.gov.
You can check the status of your consolidation at this link. (thanks to seriusblack)
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UPDATE SEPT 2008: It appears that the consolidation market has completely dried up...Many of the previous consolidation providers are no longer providing incentives (if they are still in business at all). Most are either:
1.> defunct or no longer offering consolidation loans.
2.> Offering consolidation loans only to those with an existing loan with that lender/servicer.
3.> Incentives limited to 0.25% rate reduction for direct debit payments.
you can check the status of your consolidation at the NSLDS.
NEW LIST OF CONSOLIDATORS:
Taking consolidations, .25% reduction for auto debit
OLD INFO BELOW: ================================================================= (Insert any new information above this line: old info can be deleted as it is confirmed that they have nothing useful to offer.)
For Ohio students/residents: .25% immediate interest rate reduction for auto debit 1.5% interest rate reduction that is PERMANENT after 36 months or 6% principal reduction immediately that is permanent after 36 months
For non-Ohio students/residents: .25% immediate interest rate reduction for auto debit 1% interest rate reduction that is PERMANENT after 36 months or 3.33% principal reduction that is PERMANENT after 30 months
Next Student .25% immediate interest rate reduction for auto debit. They offer three different plans in addition to the .25% auto debit: 1: 1% reduction after 36 months of on time payments is locked in unless you miss 6 payments-in that case gone forever. OR: 2: .375% reduction after 6 timely payments. Plus after 36 months of timely payments an additional 1%. Not locked in: one default and gone forever. OR: 3: 2% reduction after 48 timely payments Not locked in.
10/11/07 update: .25% auto debit and- .50% Permanent rate reduction after 36 on-time payments (within 14 days past due-Do not need to be consecutive so deferment/forbearance is ok)
ScholarPoint .5% immediate interest rate reduction for auto debit 1% interest rate reduction after 24 monthly payments. This incentive lost for ever if you miss single payment within 14 days of dou date. Minimum Consolidation Amount: $10,000 (per Craig, 12/9/06) Not locked in.
College PayWay .25% immediate interest rate reduction for auto debit 1% interest rate reduction after 30 monthly payments (forfeited if you ever miss a payment by 15 days) OR .25% immediate interest rate reduction for auto debit 1.5% cash rebate on loans from $20k to $39,999 2.5% cash rebate on loans from $40k to $59,999 3.5% cash rebate on loans $60k and up
Education Services Foundation Mississippi connection needed. - up to 1% cash rebate on loans from $6,500 to $40,000* - up to 2% cash rebate on loans over $40,000* - interest rate reduction of as much as 1.75% on loans of $10,000 or more** *The cash rebate is paid after the equivalent amount is paid in interest during the first 12 months of the loan. **On loans of $10,000 ore more, receive a 0.5% interest rate reduction for payments automatically debited from a bank account and receive a 1.25% interest rate reduction after 24 months of on-time payments.
CollegeInvest.org. CollegeInvest: part of Colorado Government Student Loan program:800-448-2424: .25% auto debit, 1% off interest after 24 months of timely payments, 1% off the top of principal of the loan immediately. Guaranty that they never sell off your loan. Loans serviced by Iowa Student Loan Liquidity Corporation (probable, might be NelNet for in-school)
NelNet .25% immediate interest rate reduction for auto debit 3.33% principal balance (NB: not interest rate) reduction after 30 monthly payments--NOT PERMANENT (or 1% interest rate reduction after 36 monthly payments) NB: In Sept. 2006 an Inspector General report found that NelNet used a scheme to claim illegal government subsidies of > $250 million.
T.H.E. (aka Northstar) .75% immediate annualized monthly credit, roughly equivalent (see below) to a .75% interest rate reduction ***SUSPENDED*** no further reduction for anything else, ever
ISL Iowa Student Loan for non-Iowa connected people .25% immediate interest rate reduction for auto debit 1.1% interest rate reduction after 36 monthly payments
ISL Iowa Student Loan for Iowa Connected people: .25% immediate interest rate reduction for auto debit .75% interest rate reduction after 6 monthly payments 1.5% Principal Reduction after 6 monthly payments.
College Foundation of North Carolina North Carolina connection needed. .25% immediate interest rate reduction for auto debit 2% interest rate reduction after 48 monthly payments
North Texas HEA EDIT - as of Effective 5/1/08, NTHEA is suspending its EasyLoan Consolidation loan program. Please contact our Customer Service Department at 1-800-366-4372 to discuss other repayment options as an alternative to Consolidation. (7/26/08)
Need a TX connection? Spoke to CSR and specified you don't need Texas connection (chimera451) .25% immediate reduction for auto debit 1% reduction after 36 payments Forgives the last $600 Cash Back program: Consolidate $5500-$9999 and get $295 cash Consolidate $10k-$15k and get $595 cash Consolidate $15k and get $595 cash a $595 principal reduction after 12, 24, & 36 months Note: If you do not hold a loan through NTHEA you are not eligible for cash rebate, however, you are still eligible for the $595 principal reductions (basically applies to those without a Texas connection)
OSLA 1% immediate interest rate reduction for auto debit 1% principal reduction after 6 payments
AllStudent .25% immediate reduction for auto debit 1.25% reduction after 24 payments for California residents/ or people who went to school in CA OR No Interest for 1st year (Interest credited back after 12 months) and .25 auto debit reduction.
Graduate Leverage .25% immediate reduction for auto debit 1% reduction after 30 payments (for first consolidation) or 17 payments (for subsequent consolidations) 9-month forbearance at graduation (only for some?) Offers custom loan assessments to optimize consolidation, but you can always take their suggestion and consolidate elsewhere.
==== Most others (including CFS, Access Group, Student Loan Xpress & AES/Keystone) .25% immediate interest rate reduction for auto debit 1% interest rate reduction after 36 monthly payments Note that (nearly?) all lenders give .6% reduction when you consolidate during a grace period
SL Loan Servicers: it is also important to know or try to figure out who is going to actually service your loan.
Message edited by: lampy2k4 on 2008-11-24 13:04:58 CST
I haven't run the numbers but College Loan Corporation has:
**Borrowers who meet the minimum consolidated loan balance requirement of $50,000 and make payments on time each month for nine consecutive months will receive a cash rebate equal to 2% of their consolidation loan balance, up to $2,000. Borrowers who do not meet the minimum balance requirements but make payments on time each month for nine consecutive months will receive a cash rebate equal to 1% of their consolidation loan balance, up to $500.
hi, i'm brand new to the forum but have been reading and researching options for consolidations. i graduated college in 2003, and have already consolidated my student loans through nelnet.net (i'm not sure of their credibility, and was naive and wet behind the ears when i first consolidated my student loans). i currently also have an auto loan close to 13k, and my student loans are in excess of 15k. with that said, i have a couple questions for you FW finance gurus:
1. is there an option to consolidate both loans, and is it smart to do so? -or- 2. is there an option to just re-consolidate my student loans (i'm assuming this is what this thread is about?) to a better interest rate, or a more credible company?
thanks in advance for the assistance, and i apologize if this is a dumb post. thanks!
matt1 said:I haven't run the numbers but College Loan Corporation has:
**Borrowers who meet the minimum consolidated loan balance requirement of $50,000 and make payments on time each month for nine consecutive months will receive a cash rebate equal to 2% of their consolidation loan balance, up to $2,000. Borrowers who do not meet the minimum balance requirements but make payments on time each month for nine consecutive months will receive a cash rebate equal to 1% of their consolidation loan balance, up to $500.
If you're looking at this, NelNet has what is probably (but I'm not positive) a better incentive - 3.3% cash rebate/principal reduction after 30 months. You should run the calculators/spreadsheets on each website, as it appears that ELC will be better for some people and NelNet/CLC for others - it depends on how much you have and how long you plan to take to pay them off.
I believe accessgroup.org uses different loan terms depending on what school you are attending. For Temple Law, they offer me the following benefits:
* Access OnTime Make your first 48 consecutive loan payments on time, and, beginning with your 49th payment, you will receive a 2.0% reduction on your Federal Stafford Loan interest rate, which will remain in effect as long as you continue to make scheduled payments on time. * Access Automatic Authorize your bank to have your loan payments automatically transferred from your checking or savings account. As soon as you sign up for the program and are in repayment, you will receive a .25% reduction on your interest rate, which will remain in effect as long as you continue to have loan payments automatically transferred.
And as for ELC, their home page won't even load for me. Not a good first impression.
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And as for ELC, their home page won't even load for me. Not a good first impression.
XML Parsing Error: not well-formed Location: http://www.educationalloancompany.com/ Line Number 242, Column 39: var i,x,a=document.MM_sr; for(i=0;a&&i<a.length&&(x=a)&&x.oSrc;i++) x.src=x.oSrc; --------------------------------------^
It doesn't work in Firefox, you have to use IE (yea I know, poor coding).
Let me comment about exactly how the Northstar's (THE's) incentive works since I had a consolidation loan with them prior to reconsolidating it recently.
Let's say you have a $72,000 loan balance which is amortized over 30 years. That gives you monthly payments of about $333.00 a month. Now, after you make your first payment to northstar, in the beginning of the next month (usually between the 1 and 8 of the month), they will apply a "bonus" equal to .75% of your current loan balance divided by 12 so in my hypothetical, it would be 72000 * .0075 / 12 = $45. That gets applied as a payment to your account. It will first go to reduce the outstanding interest, if any, and then the principal, if any bonus is left over. It is a true credit on your account like a payment would be applied. So you can use that amount to reduce your monthly payment if you want (ie, you only pay $333-$45 = $288) or you can continue paying whatever monthly payment you want, whether that is the full amortized amount of $333 or something more. The bonus payment each month will go down by a little bit since you will be reducing your principal each month and the bonus calculation is done monthly. So your next month's bonus payment will be approximately $71875 * .0075/12 = $44.92.
The problem with using it to reduce your current monthly payment is that you won't know for sure what your next monthly payment amount will be until after the THE bonus is applied to your account that month. So you won't be able to put this payment on automatic. You will have to go to their website each month and look and see what your payment will be after the bonus is applied each month -- then make an electronic ACH payment based on that info.
It is a good program for people who are looking at more cash flow in their pockets up front, rather than incentives that will reduce the overall amount paid in interest.
Slightly better than the pack for non-Iowa connected people
1.1% rate reduction make your first 36 monthly payments on time. plus .25% rate reduction make your payments through automatic withdrawal.
For Iowa Connected people:
.75% rate reduction when you make your first six monthly payments on time. .25% rate reduction when you make your payments through automatic withdrawal. PLUS 1.5% Principal Reduction when you make your first six monthly payments on time.
ELC says the 1.25% interest rate reduction is good for borrowers with more than $20,000 in federal loans. So probably not a good option for those with less than $20,000.
lilweezy said:hi, i'm brand new to the forum but have been reading and researching options for consolidations. i graduated college in 2003, and have already consolidated my student loans through nelnet.net (i'm not sure of their credibility, and was naive and wet behind the ears when i first consolidated my student loans). i currently also have an auto loan close to 13k, and my student loans are in excess of 15k. with that said, i have a couple questions for you FW finance gurus:
1. is there an option to consolidate both loans, and is it smart to do so? -or- 2. is there an option to just re-consolidate my student loans (i'm assuming this is what this thread is about?) to a better interest rate, or a more credible company?
thanks in advance for the assistance, and i apologize if this is a dumb post. thanks! bueller?
lilweezy said:have already consolidated my student loans through nelnet.net i currently also have an auto loan close to 13k, 1. is there an option to consolidate both loans, and is it smart to do so? -or- 2. is there an option to just re-consolidate my student loans 1. No. No. 2. If you have just one consolidation loan, no. If you have at least one unconsolidated loan, yes. See this site for more details. And if you come across any loan consolidation benefit packages from a lender we haven't mentioned, be sure to add it to this thread.
duna said:AM I CORRECT: AFTER 30 MONTHS THE NEL NET IS FAR THE BIGGEST INCENTIVE?
No. NelNet offers a principal reduction. ELC offers an interest rate reduction. The math is different. I haven't done a spreadsheet (someone here probably has, and I invite them to post their math), but I think that generally the savings from NelNet will be greatest if you are going to pay off the loan shortly after getting the principal reduction, and perhaps if your base interest rate is higher (b/c you aren't paying that high interest on the principal that was reduced). But if you are going to stretch out the payments, and already have a low interest rate, the interest rate reduction programs will yield a greater savings because with NelNet the savings is primarly just the one time reduction plus only the small periodic reduction of the interest rate on the now paid off principal. The savings from the ELC rate reduction is a savings that applies every year to your principal balance (of course the savings decreases as the principal is paid down) so the total savings should generally be greater than NelNet for longer term loans.
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