Student Loan Questions

**TigerGirl1226** · 01-21-2009, 04:49 PM

Ok, so DH and I both have student loans through Sallie Mae. We would like to consolidate them into one payment we think. Has anyone had any experience with this? Would you advise it?

I talked to SM today and they said they don't consolidate any more that I would have to find a third party lender.

Any help would be appreciated.

Kathryn

**MoonMommy** · 01-21-2009, 06:52 PM

I don't think so. The reason being what happens if you end up divorced before the loan is paid off? I know that when our marriages are going well, we don't like to think about that, but you never know what the future holds. What if you put the new payment under your name, then there is a divorce, now you are going to have to pay off his loan along with yours. Or vice versa.

I have a friend who did this, he was married a few years, had a baby, now he is divorced. I am not sure what happened with the loan stuff but I am sure it couldn't have been good.

**Contrary Housewife** · 01-21-2009, 10:56 PM

Consider that your loans are probably already at a very low rate.

When Sallie Mae was offering consolidations a few years ago, the rate was a percent or two lower than my original rate, but the term was much longer. I did the math and would have ended up paying almost 30% more over the years.

What I did instead was snowball the payments. I doubled, then tripled my payments and saved a bunch of money by paying them off years early.

To find a 3rd party to do the consolidation you have to call around and talk to bankers. Make appointments with loan officers. I can't tell you what their response will be. It will depend on the amount of your debt, your income, and your other finances, and how secure they feel about doing business with you.

**TigerGirl1226** · 01-21-2009, 10:59 PM

I looked into it more. My loans are at 4.75% and DH is at 3.375%. I guess I'll just leave it be after realizing that we both have good interest rates.

**rasilla** · 01-22-2009, 01:02 PM

What we did was pay off my loans as fast as possible (this gave us a better credit score as we had no credit history at the time) we then qualified to an incredibly low rate when we consolidated my hubby's school bills (his were partially subsidized to begin with). We currently pay 1.859% interest and no, we are in no hurry to pay that off, even though the payments will last for a couple decades.

I don't know if I would consolidate them together between people. How much interest would you save? If it is only a point or two it might be better to snowball them. I don't think they are offering the rates they were for student loans. Also, if you don't have a house it is good to build your credit by showing you can pay off non-consumer debt. I know the mortgage person told us that was part of the reason we got a good rate. I am glad I followed my Dad's advice and waited to consolidate.

Also, shop around for a good deal... and be careful of pre-payment penalties and other fees/fines or adjustable mortgages. I saw a ton of consolidation scams.