Student Loan Consolidation

The majority of personal finance articles are either light-weight “press fluffs“ or hidden pitches from companies for their financial products packaged by a reporter. Once in a while a very solid personal finance article makes an appearance.

Many consumers carry college loans as a portion of their debt. A recent article from SmartMoney.com outlines some important thoughts regarding the consolidation of student loans.

One of the key points made in the article is that it will be best to hold off on consolidating loans until July 1st. Interest rates have been dropping over the past year with the Fed rate cuts. If you consolidate before July 1st, you will be paying the higher rates from last year. Those who consolidate after this date can take advantage of the new lower interest rates.

Another important point is that it is not advisable to consolidate existing fixed-rate student loans. Only variable rate loans should be consolidated.

There are also issues regarding standard repayment periods and extended repayment that consumers should consider for these loans. Many financial institutions market student loan consolidation as a product to generate fees. It is important that consumers recognize what is in their best interest when contemplating consolidation as an option.

The article provides some solid detail about the various considerations consumers encounter with student loan consolidation.

Consolidating Student Loans Not Always Best Option