Act NOW To Save On Student Loans

Ray Martin: Speed Critical To Pay Less

(CBS)  Lots of college graduates are heading out into the real world under a real black cloud by carrying lots of student loan debt.

The Early Show financial expert Ray Martin says they can still lock in at a low interest rate to pay that debt off, but only if they act right away.

The national average of all loans grads take with them from campus is $19,200, according to the Education Department.

"You go through school," Martin explained to co-anchor Rene Syler Wednesday, "four years of college, and you cobble together how to pay for it with four to seven different loans. … At the end of that, you've got to start repaying them.

"There's a transaction called loan consolidation where you can take one loan out for the amount of all of those little loans, wrap it all into one loan, and make one payment to one provider.

"The benefits of that are, it's simple, so you're not trying to pay multiple payments and missing on any of them. You save money, because you can lock in a low interest rate that I know is going to rise in July, so this should be National Student Loan Consolidation Month right here! And you lock in certainty: Your payment will never change on a loan consolidation loan."

But, stressed Martin, time is of the essence.

"If you're a current student and you have loans or you're a graduated student and you have loans, you have got to look at loan consolidation now, before June 30," he said. "That's because the interest rate that you'll get on a consolidation loan now is going to be the rate of all your student loan rates. And, in July, the rate on all your student loans is going to go up by almost 2 percentage points. If you consolidate after July 1, you're going to pay 2 percentage points more. You're going to pay more money. It saves you money now to do this now."

Two percent may not sound like much, Martin said, but it adds up over time.