Anyone know if there is any reason to consolidate right now?
I've got small loans for 6.8% and 2.3%.
I've got big loans for 6.0% and 6.8%.
I'm not liking my current accrued interested. I want to make paying these as easy as possible.
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Nov. 4, 2011 4:37 p.m. PHeller Dork
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Nov. 4, 2011 4:55 p.m. Josh Dork
Because interest rates are at historical lows that are completely economically unsustainable?
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Nov. 4, 2011 5:27 p.m. BoxheadTim SuperDork
How does these compare to current interest rates? If they're noticeably lower now and you get to refi them without too much additional cost, I'd do it.
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Nov. 4, 2011 5:46 p.m. trucke New Reader
If you consolidate it will take you longer to pay them off and you will pay more in interest expense. Set a priority (highest interest or lowest balance) and pay extra on the #1 priority only. Pay minimums on the others. When #1 is paid off, add the amount to the next priority. This will save you way more money than consolidating. The %APR is a marketing tool to keep us all debt, but think we are getting a 'deal'. As soon as you refinance, the amount of front loaded interest goes up. You actually pay more!
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Nov. 4, 2011 6:11 p.m. Streetwiseguy Dork
It all depends upon current rates and your banks attitude. A few years ago...ok, 28 years ago, when we got married, we went to the bank to clear up various credit cards, small loans, etc. None were past due, none were over any limits, but the simple act of us asking to get out from under some high interest credit card debt made us bad credit risks, and we were treated like we were about to default and declare bankruptcy. We cut up the store cards, got to work paying, and cleaned it up ourselves, but it took longer and cost more money than it would have with a cooperative banker.
I also refinanced my car loan several times- I bought new in 82 because I had a down payment and I NEEDED a new Z28. Interest rates on new car loans in August 82 were 21%. Two years later, I refi'd at 16% and thought I was on top of the world.
I would go sit down with the bank manager, state your case, and ask his professional advice. (try not to snicker while you are saying that.) After he gives you your deal, head to the nearest competitive bank, and tell that manager what the first one said. Repeat until the interest rate bottoms out.
You will save money by lowering interest rate and keeping payment the same, and you'll cut the term in half by adding $50 a month to the payment.
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Nov. 4, 2011 6:38 p.m. moxnix Reader
Last I looked the student loan consolidation just took the weighted average of your interest rates to make the new rate so there were no savings as far as interest goes for student loans.
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Nov. 4, 2011 6:45 p.m. 914Driver SuperDork
Wait, wasn't Obama going to grant absolution to those?
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Nov. 4, 2011 7:51 p.m. Dr. Hess SuperDork
Jubilee, Dan, Jubilee. That's what The One promised us all. And legalized pot. And no more wars. And jobs. And unity. And ....
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Nov. 4, 2011 7:54 p.m. Josh Dork
trucke wrote:
If you consolidate it will take you longer to pay them off and you will pay more in interest expense.
Only if you pay the new lower minimum payment. Which in many cases is a good idea. My consolidated student loan is under 4%, it's probably the lowest fixed rate debt I will ever have. I will pay the minimum on that account every month until either it's paid off or I have no other higher rate debt, anything else would just be wasting money.
