If you are among the many thousands of college graduates in the United States this year facing the possibility of consolidating your student loans, the following guidelines are for you.

With so many lending companies out there fighting to get your business, you have to find a way to weed out the less reputable and sometimes even fraudulent companies from the good ones. The guidelines below will help you with this process as well as giving you key points to look for so you are better able to spot the shady organizations from the legitimate student loan consolidation companies in order to protect yourself and your finances from some heavy hits you wouldn't soon forget. Consolidating your student loans can be a pleasurable as well as advantageous experience if you know what to look for ahead of time.

Before You Consolidate Your Student Loans:

The first point I want to cover before getting into safety issues when consolidating your student loans is to remind you of an option you have with your current student loans that could cancel your student loans altogether. However, this cancellation clause is not available once you consolidate your student loans, that is why I felt it important to mention it now.

Each loan has what is called a student loan forgiveness option which states that if you consider the option of volunteer work, for example, joining for the Peace Corps or working for the US Government in low income positions such as a Doctors or teachers you can have your student loans wiped out completely. This could be a much better option for you than to consolidate your student loans if that type of work interests you, it's definitely worth looking into. Ask your current lenders about this valuable option.

There is one other time that you should hesitate before consolidating your student loans and that is if your present loans are close to being paid off. Consolidating your student loans in this case would not be in your best interest simply due to the fact that it will cost you way more money in the long run because consolidating your student loans increases the life of the loan by many years, some as long as 20 to 30 years! Finding a way to pay off the loans you have now may be more advantageous than to consolidate your student loans would be. Especially in light of the new interest rate hike about to take place on July 1st 2006 that is said to be the largest interest rate increase we have seen yet.

If neither of these options pertain to you then continue reading for the steps to take to Consolidate Your Loans safely & easily.

Step 1 - What to look for when choosing a lender to consolidate your student loans..

A) The first thing you want to look for when considering a lender is that they are reputable and well established. Reputable lenders have a wide assortment of loan options and discount plans available. Be wary of any company with only a handful of available program options.

B) be wary of any companies who request high up front fees. if they do you had better understand what they are for. Most reputable lending institutions don't require large up front fees if any at all.

C) If you are considering Federal Student Loan Consolidation, you should not be asked to perform a credit check from any lender. Why? because all Federal Student Loans are backed by the US Government and are not dependant on your credit history.

D) Many student loan consolidation programs do require credit checks but even if your credit is less than perfect, most of time your chances of qualifying to consolidate your student loans is still high. Any lender telling you otherwise is one to be cautious of.

E) The best advice anyone can give is to never let anyone rush you into signing anything. I realize the urge to rush with the impending interest rate hike just next month is great, but you have to compare each lenders interest rates to get the best value for your situation. Lenders that jump down your throat with rush tactics just to get you to sign would be a good indication to choose a different lender. READ THE SMALL PRINT before you sign anything and if you don't understand something ASK NOW or forever hold you peace. You can only consolidate your student loans once, ever, so choose wisely or spend years after wishing you had!

Step 2 - What To Look For AFTER Choosing A Lender:

Once you've narrowed your search for a lender down to a handful of good possibilities, you need to check each one for the following things:

A) Check their credentials - contact the BBB by phone or online and check to see if they have ever had any complaints and if so, were they resolved. The ideal lender won't have many if any complaints reported against them.

B) Check that the lender in question is accredited with the Association Of Independent Consumer Credit Counseling Agencies to ensure that they are legally allowed to consolidate your student loans. Lending companies conducting fraudulent business will not pass this test. Do not skip this step or chance creating a nightmare for yourself that you will be stuck with once you sign on the dotted line.

Step 3 - You've Chosen A Reputable Lender - Now What?

Once you've chosen a reputable lender now is the time to trust them and to trust your instincts. Ask what types of specials and discounts they are currently running or planning to anytime soon. Lenders are always running special promotions and no doubt with July 1st just around the corner some sweet deals will be made available, so always ask. It could pay off nicely.

Also remember this tip: If you consolidate your student loans during the grace period, you can lock in at an interest rate that's at least half than the current repayment rate.

With these guidelines you can now safely and easily consolidate your student loans while saving the most money and eliminating your student debt once and for all. Good luck in your search for a reputable lender!