Best Student Loan Consolidation deals

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 The information may be out of date or otherwise not accurate (although subsequent posts tend to correct any errors and I will try to update this first post).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)

I've been researching this topic as time permitted past couple days.

http://finaid.org/loans/educationlenders.phtml
http://finaid.org/loans/secondarymarkets.phtml

has quite a few lenders listed and I went through quite a few of them but haven't found anything interesting yet.

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.


Also, .25 reduction for auto-debit.

CLC

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!

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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Location: http://www.educationalloancompany.com/
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--------------------------------------^

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.

really informative thread, guys. this is just what i've been looking for with UHEAA's about-face on consolidation. thanks.

anything for people connected to TX or LA?

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?

SUPER INFO. THANK YOU FOR THE UPDATES AS THEY ARE POSTED.

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.

I also found this from Wachovia: Link

Keystone best for students going to school in Pennsylvania or are Pennsylvania residents. A 2.25% reduction of the interest rate after 48 months. Im not sure if they do consolidation loans, might be worth giving them a call.

Another alternative:

http://www.key.com/html/H-1.39.a.html
AES / Key
0.25% direct debit
5% upfront CashBack on principal (you'll get charged it back if you pay off / are late within the first 36 months).

what about the fact that most barrowers end up not qualifying for these interest rate discounts because of a single late payment or perhaps an error in the paper trail. Wouldnt that make THE more attractive since their incentives are active as long as your account is current, even after a late payment. Also, how can one find out if interest is compounded montly or yearly with the various lenders?

Khabibul35 said: UFCU:

http://www.ufcu.org/accounts/loans/education/consolidation.php

1.25% rate reduction PLUS principle reduction!
Principle reduction only if loans were originally taken out w/ UFCU.

I found another good loan candidate:
North Texas Higher Education Authority
Auto-Debit: .25% off
Bonus: 2.5% off after 48 consecutive payments
NTHEA will forgive last $600 of loan.

Rate Reduction Info

jiffy said: Ugh, I'm really aggrivated. I'm graduating this May, this has been a VERY busy semester and it shows no signs of letting up, and I at least took SOME condolence in the fact that once I graduated, I could simply call UHEAA and consolidate my Direct Loans through them.

Well, looks like its not going to be that simple any longer, and infact much harder.

Does anyone know who will consolidate single lender direct loans?

I'm going to go and talk to my financial aid office this week and see what they suggest as well.
I'm in the same boat as you.I really didnt need the additional stress...

benjarm said: I have almost $100,000 in federal loans. I consolidated last year with dl and now I want to reconsolidate. I have 2 more years of school left. Graduate Leverage said I save about $21,000 with them vs. dl. But they put my loan in forbearance right after I graduate. Is that worse than grace period with dl, in case I need to go into forbearance somewhere down the road of my 30yr of repayment. I also looked at UHEAA, where I would have immediate repayment but can request an in-school deferment for all of my eligible loans. But that means I have no grace period with them either. My financial aid office strongly discourages us from going with Graduate Leverage and I don't understand why, they just said the forbearance is bad, so I guess UHEAA would be bad too.. Which one should I go with?
Please help!!!
Thanks!!

See my post here about why your school's preferences shouldn't matter to you. You are going to have to run the numbers yourself and see. You need to ask your school what is wrong with Graduate Leverage and why they discourage it. See if it is a reason that affects you negatively or if it just makes things easier for the school. Shop around. But as an off the cuff thought, giving up your 6 mth grace period, if it means locking in a lower loan rate for 30 years in a consolidation loan seems to me to be the way to go, but I haven't run the numbers. You should.

edited to add: you also need to look into the differences between forebearance and deferment. In school deferment can go on forever. I'm not sure what the time limits for forebearance are. Look here as a starting point.

Ok I have investigated into this. The primary difference seems to be that with graduate leverage you keep the 6 month grace period. They use aggressive collective bargaining tactics with the loan processing companies. You also receive an interest rate reduction after 18 months I think.

zdr81 said: good thread. i spent the last one week researching as many consolidation companies and found ELC to be by far the best option if you can do auto debit and make all payments on time.

Another good one is NextStudent - http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp

they will take off 0.6% from interest rate if you apply while in grace/after graduation, 0.25% for auto debit, and 1% after first 36 ontime payments. The rate will then be locked in.

The only deal with this one is that Perkins Loans do not qualify for the 0.6% reduction (stuck at 5%) but stafford loans will qualify and the overall weighted average is better (i'm getting 4.375%.

Now between the two (since I graduate late may 2006 and my grace period would end november 2006 with my stafford loans), I am planning to go with ELC because they are going to honor the 6 month grace period - i.e. interest will accrue only after nov 2006 and my first payment will be due then. I then plan to pay $500 / month from that point on for the rest of my loan term ($41K debt). That way, compared to nextStudent who will require first payment about 6-8 weeks after i consolidate late May, I get to save about $2500 for my own expenditures (need a new car). Hope this helps!

Everyone gives the 0.6% reduction for when you're in school or in grace. Not everyone advertises it, because some take it for granted. Does ELC always give the 6-month grace period? If so, that's pretty good.

Has anyone dealt with them? Are they good? My fiancee is having a nightmare with Sallie Mae, and I want to avoid that.

So basically you're PO'ed at UHEAA because you were too lazy to figure out where you had loans and fill out the paperwork?

I listed all of my loans on the form, just as the INSTRUCTIONS SAY TO DO! and did not have any problem. Aside from a slight interruption of the 1.25% when I switched debit accounts, I have had no problems with them.

frank6439 said: Can anyone suggest a compnay that will consolidate my private student loans with a fixed interest rate? Right now I have a gaggle of private loans (one for each semester of graduate school) that supplemented my federal loans. Problem is, each loan is relatively small but requires a minimum payment of $50. Other problem is, each loan has a variable interest rate. I'd like to lock in a fixed rate and make one payment. I can only find private consolidation loans that offer variable rates (and LIBOR at that!). Any suggestions? Thank you, in advance.

Frank6439

Last I looked I think Citibank was the only one offering fixed rate private consolidation. And rates were >9% or something crazy. I'm not sure if Graduate Leverage is offering it anymore.

In short, there are no good deals in this space. Your existing loans are likely your best option.