| There are many lenders competing to meet your | | | | for an automatic deduction from a checking or savings |
| federal student loan consolidation needs, all with | | | | account, an interest rate percentage reduction after a |
| different terms and benefits. Which one is right for | | | | certain number of on time payments, or reduction or |
| you? There are a few things you should know before | | | | repayment of origination fees. Some companies offer |
| you sign up for any federal student loan consolidation. | | | | cash up front rebates for consolidation which can |
| Federal Student Loan Consolidation Basics | | | | seem like a good idea but you will almost always |
| The fixed interest rate for a consolidation loan is | | | | come out ahead in the long run with an interest rate |
| determined by a federally mandated weighted | | | | reduction. The lender should be able to provide you |
| average calculation that every lender must use when | | | | with an amortized repayment schedule showing you |
| determining the interest rate for federal consolidation | | | | exactly what the loan will cost you. |
| loans. In other words, the fixed interest rate should be | | | | Customer service - Can the lender provide all the |
| the same no matter who you speak to. The term of | | | | types of loans you are interested in and handle your |
| your loan is also determined by the federal | | | | post-graduation consolidation? How hard is it to get an |
| government based solely on your loan balance. Your | | | | actual person on the phone? Are the customer |
| base interest rate, length of loan and deferral benefits | | | | service personnel friendly and knowledgeable? Do |
| will be the same no matter who you call. So why | | | | they have a website with 24 hour access to your |
| choose one lender over another? There are two main | | | | account? Can you apply online? Do they have flexible |
| points you should consider when comparing lenders | | | | repayment options? These are all important questions |
| repayment incentives and customer service. | | | | when choosing a lender. No amount of incentives are |
| Repayment incentives - Your base interest rate is | | | | worth it if you cannot deal with the company. Be sure |
| determined by the government but a lender can offer | | | | to choose a lender who will treat you as a valued |
| you repayment incentives. Some common repayment | | | | customer. |
| incentives are a percentage off of your interest rate | | | | |