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Contributor

## Student Loan Consolidation

It will be some time before I consideration my loans to one at the end of my school term. I waned to ask couple of questions.

1. What is the best loan servicers that I can choice at the end?

2. Are the interest rates that same as what is the rate at the time. Mine will be at 2,75%, I can't find what the rate is for consideration loans.

3. Can you change the repayment as your needs change?

4. Do they send out statements like CC statements.

Sorry for all the questions but never had a student loan before.

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Senior Contributor

## Re: Student Loan Consolidation

I consolidated two years ago.

I looked into the different companies.  The ones that seem to have the least bad ("best?") CS were Great Lakes and Cornerstone (UHEAA).  I ultimately went with Cornerstone because they have CSR easily available by phone.    I've been happy with them from that standpoint.  I've called maybe 3 or 4 times and haven't had to wait long and they were knowledgable enough.   I would stay MILES away from Navient and Nelnet.

As far as Cornerstone:

The website is easy to navigate since they updated it, and you can do auto-draft for a .25% interest reduction (most if not all servicers offer this), PLUS additional payments if you choose.  I've had no problems with paying from their site or push paying from my bank.

My ONLY complaint was that when I set up consolidation, they didn't tell me that the first month wasn't automatic, but when the payment wasn't pulled, I called them and got it taken care of with no problem at all.

Interest rates are determined by a weighted average of interest rates on your current loans.  My loans were all 3.875% and that's what they still are.    The formula if you have different APRs is  the sum of variables(weight)/sum of all weights = weighted average

So you had a 10k loan at 5% and a 5k loan at 2%, you could do the math as ((10000*.05)+(5000*.02))/15000 for 4%

You can change the repayments as long as you qualify for them.   I went from ICR to standard, easy peasy.   If you have chosen an income contingent/driven/based repayment plan, you will have to recertify every year to keep it unless you want to go back to the standard payment plan.

They should send out statements.  I am enrolled for e-statements, so they send me an email notification.  Due to the CARES Act, my loans are in forebearance, so I am not getting any statements since no payment is due.

F8 EQ: 804 | EX: 794 | TU: 801 | Accounts: 2/6 4/12 9/24
Happy practitioner of AZE9or10or11 | Team Finances > FICO
Message 2 of 7
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Frequent Contributor

## Re: Student Loan Consolidation

I consolidated a long time ago, so I haven't dealt with this anything like recently, but:

1)  I only have experience with Nelnet as a servicer.  I've had them for over a decade, and I emphatically recommend going with someone else.  This could be equally true of other servicers, but their CS is a nightmare.

2) To my knowledge, this will depend on what the servicer of the consolidated loan offers you.

3) I believe this will depend on the servicer as well, but I think for federal loans they're required to offer all of the usual repayment options for those.

4) Yes, they should send you monthly statements.

So, other than what Nelnet is like, my knowledge is a little shaky, but hopefully that helps.

Wallet: Chase FU & Disco IT CB
Sock Drawer: Chase Amazon, State Farm GN
TU 817, EX 817, EQ 826
Message 3 of 7
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Senior Contributor

## Re: Student Loan Consolidation

To address Slabenstein re: the interest - that is set by the Feds as a weighted average, so it won't be determined by servicer.

Per the DOE (at https://studentaid.gov/manage-loans/consolidation )

"A Direct Consolidation Loan has a fixed interest rate for the life of the loan. The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. There is no cap on the interest rate of a Direct Consolidation Loan."

F8 EQ: 804 | EX: 794 | TU: 801 | Accounts: 2/6 4/12 9/24
Happy practitioner of AZE9or10or11 | Team Finances > FICO
Message 4 of 7
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Frequent Contributor

## Re: Student Loan Consolidation

Thank you for the correction.  Do you know whether that applies to private loan consolidation as well?

Wallet: Chase FU & Disco IT CB
Sock Drawer: Chase Amazon, State Farm GN
TU 817, EX 817, EQ 826
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Senior Contributor

## Re: Student Loan Consolidation

I think it's just for federal loans

F8 EQ: 804 | EX: 794 | TU: 801 | Accounts: 2/6 4/12 9/24
Happy practitioner of AZE9or10or11 | Team Finances > FICO
Message 6 of 7
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Moderator

## Re: Student Loan Consolidation

@Slabenstein wrote:

Thank you for the correction.  Do you know whether that applies to private loan consolidation as well?

Private loans are treated just like personal loans.  Your rate is solely determined based on creditworthiness.  If considering that route, it can pay to shop around as all loans consolidated into it will now be subject to whatever rate you are approved for.

It would be entirely plausible to consolidate say 8 loans currently at 3-6% into a new loan at 12%.  While such a scenario is not a good long-term solution, in the short term perhaps consolidating a bunch of loans with 7 year repayment terms into a single higher APR can make sense for cash flow if the combined amount qualifies you for 15-20 year repayment terms and you expect to have a large increase in income a few years later, or if the reduced monthly payment allows you to instead put that money toward higher APR debt such as revolving credit.  Just a few examples.

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