Need information on paying back loans
I am in my first month of paying off my massive college loans (19,000+). I
have loans from 4 different institutions (not my fault) and I was wondering
if someone could give me advice on the best way to pay them off. I am
leaning towards consolidating them into one loan, which I know will kill me
in interest, but I think its the best way. Are there any other options? I
noticed the interest rate is 8.25%, which is the same rate as my other
loans, so wouldn't it make sense to just consolidate them.
Any advice on the best way to pay back these loans would be _greatly_
appreciated. Thanks in advance.
Well, hate to say this, and I hope VERY MUCH I'm wrong, but a few months
ago, the government temporarily stopped accepting loan consolidation
requests. At the time, it was supposed to be through the end of 1997.
The best way to pay them off is PAY THEM OFF!! :) You may wish to
contact each of the lenders and see if they are individually willing to
"buy back" your other loans, and therefore consolidate them to the one
lender. There is nothing stopping an individual lender from
consolidating, after all!
Now that you are starting to pay off your loans, watch out for your
loans being sold. It's incredibly common that once you begin paying off
your loans, they get sold to a different agency. This is legal and very
common. (I know one student who had their loan sold four times in 18
months!) The thing to be aware of is that it can happen, and if it does,
you must pay attention to where you are now supposed to be sending your
payment. For some reason, your loan is most likely to be sold shortly
after repayment starts, although it may be sold at any time. A large
number of students find themselves in trouble because they continued
sending their payments to the prior owner of the loan after it'd been
sold.
Even with consolidation, generally (this may have changed) you will be
expected to pay off your loans within 10 years. Also, read up on the
new tax laws... in some cases, a certain amount of the interest you pay
on the student loans is now tax deductible!! *cheer* Consolidation is
actually a very smart move, it will mean just writing one check each
month, and can in some cases actually reduce the amount of interest paid
(but not by all that much generally!)
Now, on a totally different tilt, the best advice I can give any student
at all: SAVE EVERYTHING ABSOLUTELY EVERYTHING you get from the student
loan agencies, lenders, whatever. Save every single scrap of paper they
send you, all statements, save the envelopes it comes in. Go out NOW
and buy a notebook just for your student loans. EVERY SINGLE TIME you
talk voice with anyone at all regarding your student loan, write down
their name, and what the conversation was about. Follow it up with a
letter (that you keep a copy of!) Keep all correspondence!! Keep all
your receipts on your payments. Keep the duplicates from your
checkbook, or have your bank send you the cancelled checks. Save
everything for the rest of your life. I'm completely serious about
this. I was burned VERY badly on my student loan over 14 years ago, and
I'm still fighting it, even though I've now paid it off TWICE. While
most students never have a problem with their loan, mistakes can happen,
have happened, and will happen. Having all your correspondence and
phone calls recorded and organized could save you a lot of trouble in
the future.