Student Loans/ Defer, combine or keep making payments

[deedee e]

Thanks for any input you may have.

I'm going back to school in Jan for an assoc in nursing.

I currently have sl (19K) with wells fargo and have made payments faithfully, they were consolidated and are in good standing. Previously went to school and earned a BSHS but it just didn't pay without a masters so I returned to nursing.

I will have take out sl's for the next year of schooling and can't decide if I should put my current sl into deferment while attending school and then consolidate all of them when I'm done or keep them separate. My current interest rate is 3.5. If it means losing this interest rate I may just have to suck it up and squeeze the payment out of our budget while going to school.

Just one more question. I have FICO of 630. I will have to look at private loans to cover what the govt won't. Is there anyone that you would recommend as being a good source for a loan, easy to work with. I don't think wells fargo will look at me with that score.

I too, wish I hadn't taken on a degree that I am not using but like they said hindsight is 20/20.

Thanks D

[Cynic]

If a significant portion of your existing loans are subsidized it would be in your best interest to get a deferment while in school and continue to make payments while in deferment. Since the governemnt pays the interest on your subsidized loans while in deferment, more of each payment you make would go to principle and less to interest.

 

If you were to reconsolidate, the interest rate would be a weighted average of all the loans included. Both the interest rates and the balences of the underlying loans would be weighed in calculating the consolidation rate, so a high balance at a low rate would weigh higher than a small balance at a high rate. Here's a calculator that might help you see how it's done:

 

http://www.federalconsolidation.org/aginew...e_worksheet.htm

 

With your credit score you may be offerred sub-prime private loans. A comaker with a higher score might help, but keep in mind that prime-rate private loans often have significantly higher interest rates than federal loans. As of today most stafford loans are still variable and at 7.14%; those disbursed after 7/01/06 are fixed at 6.8%.

[deedee e]

Thanks for the input.

I am researching private lenders now.

I will probably defer but continue to make interest payments.

Thanks also for the website. It was helpful in trying to make a decision.

D