Is it smart to consolidate my student loans?
I have four separate student loans with different interest rates and I'm tired of keeping track of multiple payments. My lender keeps sending me offers to consolidate them into one loan. Is consolidating a good idea? Will my interest rate go up or down? Are there any catches I should watch out for?
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3 Answers
The biggest financial mistake I see people make is not having an emergency fund. Before investing, before paying extra on debt, save 3-6 months of expenses in a savings account. This protects you from going into debt when unexpected things happen.
Read 'The Millionaire Next Door' and 'A Random Walk Down Wall Street.' Those two books taught me more about money than anything else. The library has them for free. Most people who look rich are actually drowning in debt — real wealth is quiet.
I made this exact mistake when I was younger and it cost me. Learn from others instead of learning the hard way. The personal finance section of any bookstore has dozens of books — they mostly say the same sensible things for a reason.
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