Many students realize that at some point, they will probably want to consolidate student loans that have accumulated over the years. What some don’t realize is that there are ways to save on the costs of consolidation. Unlike other types of loans, student loans can only be consolidated one time so it’s extremely important borrowers get the very best rates and terms they can.
Depending on when you took out your student loans, you could save by consolidating either before you leave school or before you begin repayment for more favorable variable or low fixed interest rates. This is because rates are lower during in-school deferment and while you’re in your six month grace period that follows graduation. Just be aware that if you consolidate before you are out of school, you will forfeit your grace period. However, some lenders may offer a financial hardship deferment for six months should you need it upon graduation.
Another way to save is to look for incentives offered by lenders for on time payments or automatic payment withdrawals. If you can save even one percent over the life of you loan with such incentives, you will save considerably. When you calculate student loan payments that are consolidated at a 1 percent interest rate discount, the significant advantages of these special offers becomes very clear.
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