USAA Student Loan Consolidation
Once you leave school and exit your grace period, you enter into your loan repayment period. This is when you will start repaying your student loan(s). It is common for students to need more than one loan to afford all the costs of college and if this is the case, you will likely have multiple payments due at potentially different times and possibly to different lenders. A consolidation loan can help you simplify all of your loans into one manageable loan with one payment.
If you have federal student loans funded through the U.S. Department of Education, you will need to apply for a Direct Consolidation Loan. If you have any private student loans through financial institutions or organizations, however, you may apply for a refinance loan. USAA has a relationship with Wells Fargo Bank to offer this and other private loans to its members.
What Happens During Consolidation
When applying for a consolidation loan, you need to provide pertinent information about each of your current loans. For example, you will need to give your lender information and account number, outstanding balance, and monthly payment amount as well as your interest rate and type (variable or fixed). You will also need to provide your:
- Current home and school addresses
- Name and telephone numbers
- Residency information
- Social Security number
- Personal reference
- Gross income amount
- Amount of loan requested (up to a maximum of $120,000 for this loan or $250,000 for this loan and other education-related debt total)
Consolidation loans are based on approved credit, and sometimes you will need a cosigner in order to qualify, or at least to qualify for the most favorable terms and rates. A Wells Fargo Private Consolidation Loan takes about 45 to 60 days to process during which time you should continue paying on your existing loans. Once you are approved and your loans are paid off, you will start paying your consolidation loan to Wells Fargo directly. USAA members are entitled to a 0.25 percent interest rate reduction, and you can receive an additional 0.25 percent discount if you enroll in automatic payments.
When to Consolidate
In addition to simplifying loan payments, consolidation can have many benefits. Private student loans often have variable interest rates, meaning that rates can go up and down. If your current loan rates are high, or keep going up, you may be interested in consolidating into a lower variable or a fixed rate.
Wells Fargo Private Consolidation Loans offer competitive variable and fixed interest rates. After graduation or leaving school, you may not have the income you had projected, making your monthly payments difficult to make successfully. Loan consolidation may be able to lower your monthly payment amount or open doors for flexible repayment plans. It is important to remember that lowering your payment amount may be done by extending your loan term, which means you will pay more interest through the life of your loan. Consolidating your loans may also make you ineligible for some of the loan’s original benefits or repayment options, so be sure to check into that before consolidating.