How To Shop Around For the Best Consolidation Loan Discounts

As some students prepare for graduation in December and others get ready to make their first student loan payments, many will be bombarded by student loan consolidation offers. So, how do you compare them? Just follow these simple tips:

Keep in mind that larger discounts do not always equal more savings. Some lenders may offer large discounts like 2.00% off your interest rate, but may require 48 months of on-time payments before the discount is applied. This benefit, although it is a larger reduction, will not save you as much money as a 1.5% interest rate reduction that can be earned immediately. The sooner you can earn the benefit the better. You’ll start saving faster and have less chance of being disqualified for making a late payment.

Consider whether or not the benefits being offered are permanent. Some lenders will require that you continue making on-time payments even after you earn their benefit. In this case, they may take all your savings away if even one payment is late. Making on-time payments for the life of a loan can be a difficult task, especially when the payments are stretched out over 20 to 30 years. Lenders who don’t offer permanent benefits are hoping they will make more profit by disqualifying most of their borrowers.