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Should I consolidate SLs?

Established Member

Should I consolidate SLs?

Hey all, I'm in somewhat of a predicament here on whether or not I should decide to consolidate my student loans (or which ones to consolidate).. 


I graduated in May and currently have 9 SL accounts outstanding (paid off 2 in last 3 months, 3rd will be finished this month), so that leaves 8 accounts that will be active at the end of the month.  My question is, is it worth it to consolidate some/all of the loans in order to reduce the number of accounts on my CR given the balances/interest rates I currently have? 


I'm concerned that even though it may bump my credit score up, consolidation will drastically increase the amount of interest I end up paying over the life of the loans even if I still pay it off in the same amount of time simply due to the fact that I can't pay off the higher interest rate loans earlier than the lower rates..  My current EQ FICO is 691, but should be higher once my next revolving balance gets reported (had high util last month at 29%, will be down to 7%)... would lowering the amount of accounts have any significant impact on my score?


If so, should I just consolidate a portion of the loans? Which do you think would be in my best interest to include in the consolidation given the accounts I have?  Right now my priority is getting rid of the 6.55% loans so I wouldn't include them in the consolidation in order to get them paid off ASAP..


Thank you in advance for anyone who takes the time to reply to this..I know it's a lot of info/questions =/


Outstanding balances:

1. Subsidized Direct - $4,942.41 @ 3.15%

2. Subsidized Direct - 5,380.18 @ 4.25%

3. Subsidized Direct - 2,168.94 @ 5.35%

4. Subsidized Direct - 2,168.94 @ 5.35%

5. Subsidized Direct - 963.98 @ 5.35%  

6. Subsidized Direct - 3,414.06@ 5.75%
7. Subsidized Direct - 3,403.06 @ 6.55%

8. Unsubsidized Direct - $677.40 @ 6.55% (will be paid off this month)

9. Fed Perkins, 2,972.50 @ 5%

Message 1 of 6
Established Contributor

Re: Should I consolidate SLs?

It wouldn't make much of a difference in your credit scores; the only really great reason to consolidate is to make payments a little more streamlined. (One instead of eight is much easier to manage.) If you consolidate, they use a weighted average to figure out your interest rate. So there's not much difference there, either.

If you're just looking to make a single payment, that's fine - but to be honest you seem like you have a good handle on things. I don't know that you'd see a huge benefit from consolidating.

Message 2 of 6
Established Member

Re: Should I consolidate SLs?

Thank you for the input...I've been trying to weigh these option for a while now and since I discovered this forum figured I may as well get some feedback from people who have a better idea than me!  It actually doesn't even simplify the payments for me really since all but the perkins loan are paid automatically through the federal website, and the perkins is also automatically drafted from its own site.


I've just been prepping towards applying for a new auto loan recently and am trying to get the score up to the optimal point.. I don't want to end up with a much higher rate than I could've received just from making a few simple changes!


Thanks again!

Message 3 of 6
Established Contributor

Re: Should I consolidate SLs?

Best of luck with your auto loan - I really think you are doing everything just right.

Message 4 of 6
Valued Member

Re: Should I consolidate SLs?

Consolidation may actually increase your interest rate so be sure to be VERY careful and get the facts.  For example when I consolidated my Federal Student Loans they had to take the average and apply to all so some went up while some went down.  Don't assume...ask.


Good luck!

Starting Score TU: 520
Current Score TU: 725. EX: 736. EQ: 719

Chase Freedom $12k, WellsFargo $4k, Barclay $5k, BCU $15k, Discover $5k, USAA $7k, Lowes $4k, Home Depot $4k, Citi $13k
Message 5 of 6
Established Contributor

Re: Should I consolidate SLs?

Excellent point! When you consolidate it's a weighted average.

Message 6 of 6