Private Student Loan Consolidation
Private student loan consolidation programs provide the opportunity for significantly lower monthly payments by combining all private student loans into one manageable loan. College graduates with any private student loans may be eligible for a private consolidation loan.
In addition, a private student loan consolidation can actually help improve a credit score. The process works by paying a single bill through a bank at a fixed interest rate. When the old loans are paid off, it reflects favorably on a credit record as repaid debts.
Benefits of Private Loan Consolidation
- Lower monthly payments
- Potentially lower interest rate
- Repayment simplification
- Credit improvement
- Potential for additional repayment incentives
How to Consolidate
Students with private loans must apply for consolidation directly through a consolidation loan lender. Unlike federal consolidation, which is through the Federal Department of Education, private consolidation loans are offered through banks, credit unions, and other private lending institutions.
Before applying, students should understand their consolidation options. Most lenders allow borrowers to file the application directly on their website, making the process straightforward. Before applying, borrowers can calculate their savings with the consolidation payment calculator from StudentLoanConsolidator.com.
Note: Federal student loans should not be consolidated with private student loans, as this could lead to the loss of federal repayment benefits. Consolidating federal student loans prior to consolidating private student loans can improve a credit score, which helps students qualify for a better interest rate on a private loan consolidation.