private loans and stafford loans, when and how to consolidate?

[dizzier]

I have two private loans and 3 stafford loans. I am in grad school so the staffords are deferred until I am done ie. 2014. I am currently in repayment on one of my private loans and am in the grace period on the other (until March 2009).

It's my understanding that you cannot or should not consolidate private loans with stafford loans. Is this correct?

When should i consolidate my two private loans? do i try to do it now? do I wait until I begin repayment on the second loan? Do i consolidate through my lender/holding company AES? Is there a better program to go through?

I appreciate your advice.

[Anonymous]

Great question, I am currently in the same situation. 2 Privates and several Staffords, any advice on this would help!

[Anonymous]

Don't consolidate your feds with your privates.  In fact, I'm not sure that you even can.  The rate on feds are government regulated and generally much lower than the private loans.  The private loan rates are based on credit.  And I don't think any lenders, besides Wells Fargo, are even offering private consolidation right now.

[Anonymous]

Private student loans are about the worst thing to have.  It's like a loan shark.I had $51,000 when they came due in 2003 and have been paying between $500-$600 a month for the past 5 years the scheduled payment is $400. I have $42,000 currently.  The rate has fluctuated from as high as 9% now down to 5.4 %.  There have been times I have only paid the interest.  They can do anything they want with those loans.  It's almost impossible to consolidate them and there is usually no deferments available.  They can grow and they are with you until you pay them or die like child support or IRS debt.  Be careful of "graduated" plans-they may give you an amount so you are current but you are barely paying any principal.  Work your ass off to pay them.  Don't consolidate them with the federal- you probably cannot anyway.  Consolidate your federal loans with direct loans/us dept of education, put them in some time of deferment and work on paying off the private loans.  When the interest rate goes back up, it going to be tough.

[kimg727]

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@dizzier wrote:

It's my understanding that you cannot or should not consolidate private loans with stafford loans. Is this correct?

When should i consolidate my two private loans? do i try to do it now? do I wait until I begin repayment on the second loan? Do i consolidate through my lender/holding company AES? Is there a better program to go through?

I appreciate your advice.

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I did student loan consolidations for both federal and private loans for over 10 years.

You are correct; don't consolidate them together, unless the federal loans are under $1,000.  There are some shady companies that will consolidate them together and in doing so, you loose your federal rights and benefits on the federal loans and the entire loan becomes private (biggest mistake ever).

Consolidate the private loans when they all go into repayment.  I wouldn't do it beforehand, unless your current interest rate (the one in repayment) is through the roof.  Keep in mind the origination fees involved in the consolidation.

There aren't many companies that do private consolidations anymore.  It's best to just do an internet search. I know Chase is using ACS to do the origination and servicing. Sallie Mae, last I knew, stopped consolidating them but that may have changed, as I've been out of that line of work for about a year now.

Message Edited by kimg727 on 12-28-2008 01:33 PM