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| The Right Time for Consolidation |  If your purpose is to lower monthly payments, increase cash flow, and lock in a fixed interest rate, anytime is a good to consolidate student loans. But there are a few windows of opportunity that can increase cost savings even more:
Consolidate student loans during the grace period
When you consolidate student loans during the 6-month post graduation grace period, you’ll benefit from one of the largest money saving opportunities available. During this grace period, the interest rates are almost 60% lower than when the loan moves into repayment status. The current government rate on the loan influences the interest rate you receive when you consolidate student loans. When you consolidate student loans during this short period of time you lock in an extremely low rate for the next 10-30 years of repayment.
When to apply to consolidate student loans
It can take several months to process an application to consolidate student loans. It’s advisable to apply as early as possible to ensure that the process is complete by the time your grace period ends. Applying to consolidate student loans online can greatly lower the amount of time to process the loan. Most borrowers who apply online have their loans processed within a week as opposed to several months. You won’t lose the advantage of the grace period if you apply to consolidate student loans early. On the application you’ll be able to point out when you’d like to start the loan repayment.
Consolidate Student Loans by June 30th 2006 to lock in today’s lower rates
Every July 1st, the government revises the student loan interest rates. As in any market, sometimes interest rates are more auspicious than during other times. In 2006, rates were greatly higher than in 2005. The increase is part of a plan to lower the rising national deficit by increasing the amount of interest paid back on student loans. It’s still recommended to consolidate early, if you don’t get to consolidate student loans by June 30th 2006. Rates in coming years are expected to remain higher than they have been in the recent past.
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