Consolidate Student Loans before June 30th

Every year variable-rate student loans have their interest rates adjusted on July 1st based on the 3-month Treasury yield at the end of May. With May nearly in the books, it’s estimated that the interest rate will jump from 5.3% to 7.3% on Stafford Loans, which means you have a month and change to consolidate before the hike occurs. Consolidating now to a fixed rate will probably get you a 5.375% rate, which is still pretty good and much better than 7.3% (no matter what you got in Calculus freshman year).

Some rules about consolidation…

You can only do it once, but if you’ve done it in the past then chances are you’re already locked in at a ridiculously low rate anyway if you’ve graduated in the last five years or so.

Consolidate before June 30th.

You can consolidate even if you only have one loan! This is critical. If you have a variable rate loan, you can consolidate it to a fixed rate loan even if you only have one loan in the first place.

If all your loans are from Company XYZ, you must consolidate with XYZ otherwise you can consolidate with any of them. Compare rates and other factors to choose which one to go with, if you have a choice. Look for special deals like a quarter point discount if you do direct withdrawals from a bank account or for timely payments X months in a row.

Don’t consolidate between people. I know you’re in love and in it for the long haul, but don’t consolidate your loans with your husband/wife. It’s unnecessary and can only cause legal hardship down the road no matter how positive the outcome.

via CNN Money.