You succeeded in completing your college education. Perhaps you went on to complete a graduate or professional program after completing your undergraduate degree. Regardless of your educational path, chances are you have a significant amount of student loan debt. Not only can it be challenging to make the minimum monthly payments, it can also be difficult to manage the multiple payments to multiple lenders. If you have both federal and private loans, this can be extremely frustrating.
If you are having a hard time keeping up with your student loan payments, you may want to consider consolidating your student loan debts, whether they are federal or private, or both.
Fannie Mae Loan Options
Fannie Mae itself does not offer student loan consolidation services, but its partner, Sallie Mae, does. Sallie Mae is not permitted to offer federal student loan consolidation, but it does offer consolidation loans for private student loans and other debts, such as credit cards or auto loans.
Sallie Mae offers loans for private student loan debt consolidation with a variety of repayment options. If you have both federal and private student loan debt, then you may want to consider a lender who will allow you to combine both into one single consolidation loan. However, some people may choose to consolidate their federal loans into one loan, and their private loans into another single loan. Although this means two monthly payments, it still reduces the number of payments and the amount, in most cases.
Understand Your Debt
To make the best decision for your specific financial situation, you must first analyze your student loan debts. You should itemize each debt and include the total loan amount, the minimum monthly payment, and the interest rate. This should be used to compare consolidation options. If the consolidation loan has a higher interest rate or higher monthly payments, then it is not a good idea to pursue the loan.
Regardless of your credit score, you can find a student loan consolidation option with competitive rates and lower monthly payments than what you are currently making. If the interest rate is higher and the loan term is extended, you could end up paying a significantly higher amount in interest over time than you would have without consolidating.
If you are considering pursuing student loan consolidation, be sure to understand the details and read the fine print of any loan agreement before you sign it.