Student loan consolidation can be a very beneficial thing. You can take a number of different loans, get them all grouped together at a low fixed interest rate, and make one monthly payment that may be less than what you were paying before. So many people have in the past consolidated their student loans to a very low fixed interest rate, that it is almost assumed when you say that you have student loans, they are at 4% or 5% or even less.
Not mine. And yes, I’ve already consolidated them. No do-overs. Too bad for me.
My student loans are pretty old. I obtained them to help pay for my undergraduate education, so my loans were dated 1992-1995. Because I went right to graduate school from undergrad, my loans were deferred without accruing interest until I finished my PhD in 2001 (I have no loans from my PhD program). When I completed my doctorate and got my loan repayment information, I called up Sallie Mae, and consolidated my three loans from them with my one directly federally funded loan.
No questions asked. No “what are your interest rates?”. No research into different companies I could consolidate with. Nothing. Just “Hey I’d like to make one payment not four, so can I consolidate my four loans please?“.
I had no idea what I was doing. I had no idea why one should and should not consolidate, and it didn’t even occur to me to look into it before I did it. Just “hey, let’s make one payment a month, thanks!”
My loans are consolidated at 7%. It isn’t the worst I could do, but just a year or two later, I could have gotten rates like those 4% you hear people talking about. Maybe even sooner. I don’t know, because I didn’t do any research. Since we’ve just begun aggressively paying off my spouse’s loans (consolidated at 9% in 1997, again, well, oops, but his oops this time) it will be a little while until I can kill off my own badly consolidated ones. But kill them off I will, and stop paying for my own ignorance.
Some lessons end up quite expensive.