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Ask Kim: Things To Consider Before Consolidating Student Loans

July 11, 2018 So, you studied your tail off, made those grades and landed your first job. Nice. Now there’s nothing stopping you from achieving your dreams … except maybe those student loans. Paying off student loans can be a big source of stress, but Kim is here to help with a few savvy tips to repay your debt faster and smarter. Question: I know I’m going to have to start paying off my student loans, what’s the best way to prepare for this expense? Should I be looking into consolidating? Answer: Good for you on preparing to tackle your student loan debt! A great way to start is to put the estimated payment away in your savings account now, before payments actually start. That gives you the ability to build a safety net while you “test drive” the payment in your monthly budget. If you find the payment is not comfortable with your other expenses, it gives you time to seek some advice on options. If you don’t already have a budget, draw one up with free budgeting tools on our . Include your expected loan payment(s). When you create a budget, consider what’s coming up in the next couple of years financially that you want to start planning for – building an emergency fund, saving for a vehicle, etc. Consider those monthly expenses to help you choose your best options for student loan repayment. Once you have a plan in place, you can also use our to figure out how long it will take to pay off your student loan debt.  At Summit, we help a lot of people with consolidating student loans. Consolidation may be a way to streamline your finances, reduce your payments and improve your cash flow. Remember, though, if you lower your payments by extending the length of time you take to repay the loan, you could be paying significantly more in interest over the life of the loan. A few things to consider:
  • Start with some research on your loans. Do you have federal or private loans, or both? You can find your federal loans listed through the , along with options available for repayment. This information is only available online, so be sure you can view the accounts and status to stay on top of your payments. Find your private loan paperwork to review the payment plans you have set up on those loans as well.
  • Before you decide whether to consolidate, find out if you qualify for any student loan forgiveness programs and determine if you will take advantage of them. For example, if you are a licensed medical or dental provider, you may qualify for loan forgiveness funds if you commit to working in an underserved area. Only federal loans quality for this kind of benefit, not private loans.
  • What is your goal for consolidating? Is it to reduce your monthly payment or to reduce the overall interest you will pay over the life of the loan? Are there any fees?
  • If a cosigner will be needed, look for a lender like Summit that will give you the option to release the cosigner after a certain number of on-time payments.
  • You may be allowed to consolidate both federal and private loans into a private loan. We’d discuss options with you first to help you determine if that is the best option for you. If this is the direction you are contemplating, !
At the end of the day, every situation is different. There’s no one right way to pay off your student loans (although there are a few wrong ways!). Whatever your case might be, just make sure you do your homework to know what you’re getting into. If you need help along the way, . You might also be interested in Financial success isn’t how much money you have — it’s feeling good about what you’re doing with the money you have. Here are some tips on how to prioritize your debts and bills, negotiate with creditors and get your late payments back on solid ground. Even in these challenging times, there's  whole lot of good happening! At Summit, we've always believed financial success happens together and that's been truer than ever this past month. Here's what "together" has meant for our community. Navigating finances after college is hard, but you can take it one lesson at a time. Get tips for managing money and paying off student debt after graduation. Navigating finances after college is hard, but you can take it one lesson at a time. Get tips for managing money and paying off student debt after graduation. If you’re not sure if something is a scam, it’s ALWAYS better to act like it could be! Fraudsters are always coming up with creative new ways to steal from you and quick to take advantage of a crisis. Here are some of the most popular recent scams to watch for. With a little planning, you may be able to actually save a little money during the holidays. Check out these tips to keep costs down without missing out on the holiday fun. Some scams go right for your money; others try to get you to part with personal information – like account numbers, Social Security numbers, passwords, and personal identification numbers (PINs). Find out what you should look for and how to protect yourself. The holidays can be stressful & that’s why it’s important to prioritize your self-care. Use these tips to reduce stress without draining your bank account. Your home is your castle, your refuge and—let’s face it—a place where it can be very easy to sink a big chunk of money. Which is why you’re always on the lookout for “sweet spots”:  those home improvements that add comfort, safety or a little zing of style while you’re living in your house and will boost the asking price when it’s time to sell. And if you can find a way to save money on those improvements or cut home expenses at the same time, well that sweet spot just got a little sweeter! Featured Products Certificates Checking Accounts Home Equity Loans Home Loans Business Banking Certificates Checking Accounts Home Equity Loans Home Loans Business Banking Financial Education Upcoming Events Programs Tools & Calculators On-demand Webinars Podcasts Upcoming Events Programs Tools & Calculators On-demand Webinars Podcasts About Equity in Money™ About Summit Careers News Community Giving Equity in Money™ About Summit Careers News Community Giving Help & Support Contact Us Member Support Center Schedule an Appointment Find a Branch Contact Us Member Support Center Schedule an Appointment Find a Branch Please read the following before proceeding to: The website you are about to visit is solely the responsibility of the merchant or other party providing the site. The content of this third-party site, including materials and information, is solely the responsibility of the provider of the site. The Credit Union is not responsible for any such third-party content. Any transactions that you enter into with a vendor, merchant or other party that you access through this third-party site are solely between you and that vendor, merchant or other party. The Credit Union does not endorse the content contained in this third-party site, nor the organization publishing the site, and hereby disclaims any responsibility for such content. The Credit Union Privacy Policy does not apply to this third-party site, and for further information you should consult the privacy disclosures of the third-party site. NCUA Insurance Estimator Privacy, Security & Accessibility Rates, Fees, Terms & Disclosures Routing Number *  The Wisconsin's #1 Mortgage Lender designation is based on the number of loans in 2022, gathered from the Home Mortgage Disclosure Act data compiled annually by the Consumer Financial Protection Bureau. The results of the data were obtained through the LEI: 254900NTAC4H10MGSU23 **  SBA Lender of the Year Award for Credit Unions as awarded by the Small Business Administration of Wisconsin in 2023. Copyright 2024 © Summit Credit Union. All rights reserved. If you are using a screen reader and are having problems using this website, please call 608-243-5000 for assistance. Insured by NCUA