I’ve been out of college for 3 years & am paying on 3 loans, how do I make these 3 loans into 1 payment?
The 3 loans are through ACS, American Education Services and The Student Loan Company (Citi). Totaling over 60k, I want to consolidate these into 1 loan and hopefully lower my payment. At the moment I pay around $600 a month on all 3.
Scott:
In general, this is what a consolidation loan will do for you – but right now, your timing is awful, and there is nothing that you can do. I am not aware of a single legitimate lender that is accepting applications for the consolidation of private student loans.
If you were looking to consolidate government loans (Stafford, Perkins or PLUS), the situation would be entirely different – the Department of Education’s Direct Consolidation program is readily available. However, as I think you can probably guess from my commentary, the Direct Consolidation program will not accept private loans for consolidation.
When the consolidation products do become available again, keep in mind that there is an extreme financial cost to consolidating loans. As I’m sure you are aware (though not everyone seems to have pondered this), consolidation loans don’t save you money by forgiving any of your debt. Consolidation loans “save” you money by stretching the term of repayment. Stretch your repayment term, and considerably more interest accrues.
If you turn a $50,000 balance on a 10-year repayment into a $50,000 balance on a 20-year plan, your payment will drop from $607 a month to $418 , but your total payments will go from $72,796 to a whopping $100,373 – an increase of more than $27,000.
Keep that in mind as you contemplate consolidation. You won’t need to make that decision right away, because as I said, I don’t believe that there are any legitimate lenders who are making consolidation loans on private educational debt right now.
Good luck to you, though!
