How to consolidate school loans
Best Answer: I hear ya. I just ended school as well.
At first, I went through a program called direct loan consolidation: loanconsolidation.ed.gov/
They will walk you through everything. However, in the end, I decided not to consolidate afterall. Here's why:
I found out that consolidating would lower my payments, but that just means I would pay more in the long run, stretched out over more time. The loan consolidators go ahead and pay off your debt to the (bank or government) for you, but then you owe THEM. Sometimes, they jack their rates more than what you would have paid to the original (bank or government).
Second thing that worried me - if you consolidate your federal loans, you might lose money. You usually have a couple of different ones, all at different rates, ranging from 5 -
7%. When they consolidate, your low interest loans suffer, because their rates get jacked.
Lastly, I didn't go with them, because they were sketchy on the phone. They wanted me to confirm everything and sign everything, but they wouldn't tell me what my rate would be or how long it would take to pay back or how much I would owe a month until I agreed to sign everything.
Now, I just pay directly to the government and the bank. If I had to do it all again, I might go straight to my trusty bank. I need to see people in person, you know? They should help you weigh your options and figure out what is best, whereas a loan consolidator is only interested in what's best. for them. Be wary!
Michaela · 8 years agoSource: answers.yahoo.com