How Can I Consolidate Private Student Loans?

If you’re wondering “how can I consolidate private student loans?” you should ask your bank or lender if they handle such consolidations. You’ll want to choose a lender you’re familiar with even if it’s just through name recognition so you can avoid fly-by –night offers and fraudulent companies who operate shady loan scams designed to separate you from your money.

How Can I Consolidate Private Student Loans?

When you find the lender who will help you when you ask, “how can I consolidate private student loans?” then be aware that you don’t get the same benefits as when you’re consolidating federal student loans. In fact, if you have both types of loans you’ll have to consolidate them privately. While you can technically consolidate a federal loan with private loans, you lose all the benefits of the federal loan and pay higher interest. There’s no reason, in that case, not to consolidate the loans separately.

Consolidating your private student loans is something you should definitely consider if having multiple monthly payments is causing problems. The biggest benefit, in fact, when you ask, “how can I consolidate private student loans?” is simply the ability to combine several loans into one and make one payment instead of several. You can also have a lower monthly payment thanks to the consolidation extending the loan for more years than your original plan.

A private student loan consolidation is much like any other loan consolidation. If you get a home equity loan to pay off credit card bills and other debts for instance, you’re facing the same general type of loan as this consolidation. You don’t qualify for the low interest that comes with federal loans. Instead, the interest rate you get is based solely on your credit score.

If your credit score has improved since you first took out the student loans, this can show you a big improvement in your interest rate. If you can get it locked in then you can really save money over time and not have to worry about fluctuations in the rate. Of course, if the rate drops you’re still locked into the higher rate. The peace of mind of knowing exactly what you must pay can be well worth that risk.

When you wonder, “how can I consolidate private student loans?” be aware that a smaller monthly payment is convenient, but the longer the loan agreement the more you end up paying in interest in the long run.