sallie mae student loan payment
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Student loan consolidation deadline is Friday
People with student loan debts are scrambling to consolidate their loans before interest rates increase on Saturday, July 1.
Interest rates on existing federal student loans will increase nearly 2 percent to between 7 and 8 percent in July, as part of an adjustment the government makes every year.
That means that if you currently have unconsolidated federal student loans, your overall payments will rise.
Experts say that with interest rates headed upward, consolidation could be a good deal for many debtors.
"There really isn't a lot of reason not to do this," says Seamus Harreys, dean of student financial services at Northeastern University in Boston.
"It's the student loan world equivalent of refinancing a mortgage," says Martha Holler, a spokeswoman for Sallie Mae, a leading provider of student loan financing, though there is a caveat.
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Students puzzled as loan rates rise
Regardless of where you borrow money for college, lenders say there are points every customer should understand. Here are five:
1. CHECK THE INCENTIVES.
Loans with identical rates can cost much different amounts, depending on incentives such as rate reductions for not missing payments.
2. BEWARE OF NO-FEE OFFERS.
All student-loan consolidations are available without fees.
3. "LOWER" CAN BE COSTLIER.
A lower rate does not always mean a cheaper loan if consolidation means you will pay those smaller monthly payments for a much longer period.
4. DO SOME RESEARCH.
Many sites offer financial aid information. Here are some of the more popular: www.fafsa.ed.gov; www.finaid.org; www.cfnc.org; www.salliemae.com
5. SHOP AROUND.
You should find plenty of lenders who do not require a credit check, do not have prepayment penalties and will answer any questions.