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I'm currently in a weird situation - I have a large amount of accrued debt (85k principal, ~15k accrued interest so far), spread amongst multiple smaller student loans. Some are federal stafford loans, which were taken out at Max, and some are large private student loans.

Currently, I'm paying them at minimum through each loan, and paying some money directly to the principal whenever I can. The problem is that with so many loans (8 different loans through four different lenders), it's very easy to forget and miss a payment, and I may have been late once or twice. (wince.)

Ideally, I would pay a larger lump sum every month with a fixed rate consolidation loan - but I've done some investigation and the largest sum I could find through a reputable agency was for 25k. The other issue is that I currently don't have any collateral, and my cosigner is less than willing to sign again.

What options are there for consolidating a large amount of student loan debt?

Edit: I have considered federal consolidation for the Stafford loans, but that's only a drop in the bucket compared to the private loans.

Andrei Krotkov
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The U.S. Department of Ed offers Loan consolidation that you may want to take a look at:

https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp

Going through a Government Agency as opposed to a private lender might reduce the burden (co-signers, collateral) you need to pass to get the loan.

trip0d199
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To add to @bstpierre's answer, you should automate all your loans except for the one with the highest interest rate. Leave that one manual, and pay the most you can afford each month, to pay it off as quickly as possible. Once you finish that loan, move to the next highest interest rate.

Ultimately, this won't be quite as convenient as just having 1 loan. The differences are:

  1. You need to set up all the automatic payments. This is probably comparable to in complexity of consolidating your loans.

  2. Each time you finish one loan, you need to turn off an automatic payment, and start doing the next loan manually. If you organize yourself well initially, you'll know exactly what order to do the loans in, so this shouldn't take too long.

However, unless your consolidated loan has the same interest rate of your cheapest current loan, you will likely save money over-all by using this method.

David Oneill
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I can't help you with consolidation, but I'd suggest automating as much of the payments as possible.

  • Do your lenders support automatic debit of your checking for the payments?
  • Can you use online bill pay to make the payments?

If not, you might take a look at any of the numerous online banks that have online bill pay, and open an account with them. (E.g. ING Direct, Ally, etc.) You can set up the online account to pull from your current checking/savings account, and then make payments from that online account to your loans.

When you have that set up, if there is some extra payment you want to make, you can set up an automatic additional periodic payment to get rid of one lender at a time until everything is paid off.

bstpierre
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