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What is the best financial strategy for paying back student loans?

Paying principal on student loans while in school & consolidating?

  • i just got a federal student loan and i received more money than i needed (but i wasnt sure how much id need at the time) so now that i have the check from whats leftover can i pay that back to the company on my loan before it starts collecting more interest...also i plan on paying all of the interest while in school but was wondering if im also able to pay extra while in school without penalty and is this going to apply to the principal? also ive seen websites on consolidating student loans and making 1 payment... this made me wonder why someone would need to consolidate student loans?what would cause you to have multiple student loans? is thi something thats based on having multiple lenders, schools, type of loans (sub or unsub.)etc... basically i am trying to understand why youd be billed seperately on loans because i would like to avoid this now so i wont have to worry about consolidating later. any insight would help =] thanks

  • Answer:

    First of all, what kind of federal loan did you take out? If you took out a Subsidized Stafford Loan or a Perkins Loan, then the government will take care of all your interest while you are at least a half-time student, which means that your principle will not increase while you are in college. If you have an Unsubsidized Stafford loan, you will still be compiling interest on your loan, and it would be wise to save any extra money and start repaying your loan. As far as consolidating goes, a great option is to go with the Federal Family Education Loan Program, or a FFELP consolidation. Many students have several federal loans; I have three myself. Regardless of how many you have, consolidating will significantly lower your interest rate on your loan, and could eventually save you thousands of dollars. For more information on FFELP consolidation and the application process, please visit the source below. I hope this helped you out! Good luck!

Mrs.BEll at Yahoo! Answers Visit the source

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No, you can't consolidate student loans while attending school. The real advantage of consolidating student loans after graduation is making one payment instead of several payments along with spreading out your student loan payments if needed. Also, it could make it easier to live off of your salary once you graduate from college. The only down side is if your career qualifies for a student loan forgiveness program that loan consolidation can disqualify you for it. I have included some resources that could lower the need for student loans in the future. Good luck!

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