Student Loans to consolidate or not?

Anonymous · ‎04-24-2008

I always thought that consolidating loans was a bad thing that implied you were having trouble with paying back loans.

My student loans, owned by Sallie Mae, show on my credit report as several seperate accounts even though I pay SM 1 amt monthly. Should i consolidate so that they only show on my CR as a single account? What are the pros/cons as far as effect on my CR?

Anonymous · ‎04-24-2008

I don't know how it would effect your credit scores, since student loans seem to be a whole other animal as far as FICO is concerned. I do know that by consolidating you are able to lock in your rate. Stafford Loans are variable, although they can only change once a year on July 1st, and the rate is set by the US Government (currently 6.8%). Generally you can lock in your rate at a rate that is lower than the current Stafford Loan rate, so it would end up saving you money immediately, and in the long-term. Check with Sallie Mae, or even your local bank or CU to see what they do for people who want to consolidate their student loans, if there are any fees that apply, and what the rate would be.

Anonymous · ‎04-24-2008

When we each consoldiated our student loans it was to lock in a lower interest rate and make it one payment each.

Anonymous · ‎05-02-2008

When I consolidated my CL's - I was counting on it going from 4 accounts to 1

It didn't it went from 4 to 2 (my SL co seperates unsub from Sub loans) I only dropped 15 points.

datgirlb wrote:

I always thought that consolidating loans was a bad thing that implied you were having trouble with paying back loans.

My student loans, owned by Sallie Mae, show on my credit report as several seperate accounts even though I pay SM 1 amt monthly. Should i consolidate so that they only show on my CR as a single account? What are the pros/cons as far as effect on my CR?

Anonymous · ‎05-09-2008

That's strange that your score went down after consolidating. Perhaps it was only a temporary thing. I had a bunch of private loans and consolodated into one loan and my score went up by about 20 points. I think I got dinged at first for the inquiry, but then it went back up after everything was said and done. Perhaps it shortened your length of credit or something which is why it went down.