Should I consolidate?

[eeyorefanatic]

I had defaulted on my student loans and successfully rehabbed them. I keep getting offers from Sallie Mae to consolidate them (I have 8 loans totalling 17k). My monthly payments are $221 which I can make no problem.

 

Should I consolidate them anyway? I guess I don't quite understand what the benefits would be.

[Cheech]

Congrats on successfully rehabbing your loans!!!

 

I recently consolidated my loans because I felt that doing so would benefit me financially. All my original student loans were at around 4.5%. I also knew that I planned to apply for a mortgage. I consolidated for 3 reasons - 1) to lock the low rate for the life of the new loan, 2) to stretch out the pmt period to have an overall lower DTI, and 3) to qualify for the interest rate reduction after 2 yrs of on-time pmts (offered by my lender).

 

Even though my required pmt now is much lower (due to the longer loan term), I still pay extra each month. But having a lower DTI allowed me to qualify for the mtg amt that I wanted.

 

You have to evaluate your own financial situation and future plans to see if consolidation makes sense for you.

 

Hope that helps...