Does it make sense to transfer my Sallie Mae loans?

Posts Tagged ‘subsidized loans’

Does it make sense to transfer my Sallie Mae loans?

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Q: I Have Four Stafford Loans With Sallie Mae – Three are Subsidized and One is Unsubsidized. I Also Have One Student Loan with Direct Loan. I am Considering Transferring the Sallie Mae Loans to Direct Loan. Does it Make Sense to Transfer These Loans?

A: When you say “Direct Loan,” I believe you are referring to the U.S. Department of Education’s Direct Loan Program (http://www.dl.ed.gov), where you can transfer and consolidate your federal education loans into a single, new loan which offers lower monthly payments. Whether or not it makes economic sense to transfer the loans depends on a host of factors, including: how manageable (or unmanageable) your monthly payments are; how many payments are left on your existing loan; the amount of time and interest you are willing to pay over time; and the interest rates on your current loans.

If you have variable rates on those Stafford Loans, it may be helpful to consolidate them in order to get a fixed rate. On a Direct Consolidation Loan, the rate is based on the weighted average of all your combined loans, rounded up to the next highest 1/8th of a percent. Your loan rate can never go above 8.25%. There are two quick and easy ways to see the financial ramifications of transferring/consolidating your loans. You can use this online calculator provided by the Department of Education. Or you can simply call the Department of Ed at 800-557-7392 and a customer service representative will be able to tell you your new payments — as well as how much extra you will pay in interest charges by consolidating.

Should I Repay my Stafford Loans Early? (studentloannetwork.com)
Zero Debt for College Grads

I am broke and in college. Where can I get money to finish my degree?

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Author: The Money Coach

Q: I Just Completed 6 ½ Years of School But Maxed Out My Subsidized and Unsubsidized Loans. I Have One Class to Take to Get My Degree, But I Have an Overdue Amount and Late Fees on My School Account. I Don’t Work and Don’t Have the Money to Pay the Fees or Pay for the One Last Class I Need for My Degree. I Also Do Not Have Good Enough Credit to Get a Loan from a Bank. Do You Have Any Advice How I Can Pay For These Fees and This Class?

A: Without a job, and with poor credit and a host of outstanding educational fees remaining, your options for paying for this last class are indeed limited. Obviously you can’t get a bank loan, and it’s clear that you lack the income to pay for the final class you hope to take. Here are three options to consider:
•   borrow money from family and friends
•   sell stuff you don’t want or need in order to raise the money
•   try using a peer to peer lending site, such as Prosper.com., where people loan money to others

As a alternative, instead of worrying yourself crazy over this “one last class,” I think you would be better served at this time focusing on trying to secure paid employment. Yes, I know that jobs market is tough and that jobs are more plentiful to those with college degrees. And I’m sure that’s one of the reasons you want to get that college diploma. But don’t let be the single thing that determines your success or failure in the job market – or in life. Plenty of successful people (think Bill Gates) didn’t graduate from college. If you find a job, your employer may be willing to pay your tuition. Plus you’ll have income of your own to repay the overdue educational costs.

Ask The Money Coach

Posts Tagged ‘subsidized loans’