Sunday, February 8, 2009

Consolidated Loans... Kind of

So, I was looking at one of our student loans, about 11k, and upon further investigation, it seems that it is actually 3 separate loans, lumped together... or consolidated (by the bank, not me). Reading a little more, any extra payment will be split across all three loans, unless otherwise specified. I guess I'm just a little confused on this snowball, should I pay off the lowest of those three loans (its what comes next) and have them put all the money towards that loan, then work on the next, or should I just keep them together and call them one loan? I don't think there will really be a difference financially, maybe emotionally though. One loan, suddenly turns into three smaller ones...

Anyone thoughts?


  1. I consolidated my loans too, and I just got the information back the other day. It looks pretty nice...until you realize that they just weighted the interest rates and extended the life of the loan out by 5 years...making it 15 years. So your monthly payment is lower, but only because it takes longer to pay off. Is that what happened to you too?

    So, after seeing that the interest rate was the same regardless whether you consolidated or not, we decided to deny the consolidation and pay off the loans individually. We did a lot of math that night, and it didn't benefit for us at all to keep them consolidated. Does that help at all? I figure too that by smaller amounts it will be better emotionally too, instead of looking at 17k worth of payments. I know, it's pretty confusing!

  2. Yeah, I think they automatically did it for me? I don't quite get it. They have different interest rates too, I think its just because its through the same company? I called them and they said that after I pay off one, I have to write them and they will rewrite the loan, which will make my payments lower, so I can add the other payment to the debt snowball. I think that's what we're going to do.

    I don't think I can deny the consolidation like you did, but I can pay them off one by one. It is much easier to look at (and the next one in the list after we pay off the one we're looking on now, is from that group) so instead of 11k, its just less... yay!

    I hate that I don't get an email whenever you comment, I need to go find the setting because it takes me forever to find these... sorry!