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Is it wise to consolidate your student loans?

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usregimechange Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 08:56 PM
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Is it wise to consolidate your student loans?
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WCGreen Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 08:56 PM
Response to Original message
1. It all depend on the interest rates and the time left...
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usregimechange Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 08:58 PM
Response to Reply #1
3. Well, I owe about 40,000 so it will take me a while
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WCGreen Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 11:42 PM
Response to Reply #3
6. Just play them all out on a spread sheet....
And see how much interest you will be paying over the life of the various loans....

Then look at the consolidation interest you will end up paying and you will see....

Of course, the esoteric factors, the need for cash at a given point, ease of payment and also the burden of paying now vs. spreading it out should also be taken into consideration....

Ultimately, if it is close as far as interest paid, since you will be able to deduct the interest on your tax return, go for ease of payment....

For instance, If you discover that if you let things stand, you will end up paying $ 15,000 in interest... but paying say $750.00 per month vs. paying $17,000 in interest but paying only $525.00 per month, maybe you should look at the money you are cutting your payment by as a loan to yourself now, the $225.00 difference...

I am an accountant, have been one for 22 years... Most people in my profession will tell you to maximize your profits by lowering you expenses... But sometimes, other things enter in that make that stark comparison invalid....
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Cyndee_Lou_Who Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 08:57 PM
Response to Original message
2. Depends on the rate(s) you are paying vs. consolidated rate.
Just don't ever ever default. I used to collect on defaulted loans for the US Dept. of Education. The penalties are re-god-damn diculous.
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philosophie_en_rose Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 10:08 PM
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4. Depends on the rates...
I waited about six months, because I knew that rates were going down. That's not quite the case in today's economy.
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blue neen Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 10:17 PM
Response to Original message
5. We consolidated our son's school loans.
On second thought, we're not sure it was a wise move. We had 3 years paid off out of ten. When they did the new repay schedule they jacked it back up to ten years. They are still going to get their interest because they increased the life of the loan!

The payments are lower, but we weren't really going for that. We were just trying to lock in the lower interest rate, but ultimately the overall interest may end up being more! :grr:
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