How And Why Should I Consolidate Private Student Loans?
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If you have multiple loans, it is a smart move to consolidate them into one in order to better manage your monthly payments and hopefully lower your interest rate, but you should not consolidate federal and private loans together.
There are ways to consolidate private student loans, but they are not subject to the same low interest rates, deferment options and other benefits that federal loans have, so you would lose all those advantages if you consolidated your federal and private student loans together.
There are few advantages to consolidating private student loans so they don't have different prices, but the advantage is twofold. First of all, you will only have one monthly fee which can be easier for you, but more importantly, since the interest rate you get is based on your credit score, there is a good chance that your credit score has improved since you first applied for the loan.
In that case, because the loan is essentially restarted, your new interest rate could be lower; based on your new credit score. If however, you have bad credit, you may not even be approved for college loans consolidation without a co-signer, and if you are, it is not a good idea to anyway because you will be stuck with an interest rate far higher as it will reflect your new credit score.
There are different options to pursue when consolidating private student loans, but beforehand, there is another trick that many people use. You could use a home equity loan, which offers interest rates similar to private student loans but that are fixed, to pay off your student loan and then having a fixed rate locked in for the remaining payments instead of being susceptible to variable rate increases.
If you would prefer to get a private loan consolidation, you can go through any one of these reputable institutions: Chase Bank, Citibank, NextStudent, the Student Loan Network or Sallie Mae. They all differ in the minimum amount of money they will consolidate, ranging from $5000-$10000 as a minimum, and they also each have different maximum amounts covered, so be careful in reading the conditions to find the one that best suits your needs.
If you have multiple student loans, it is in your best interest to consolidate them as soon as possible. Government student loan consolidation needs to be done during your grace period or period of deferment, and make sure your private school loan consolidation is done separately but also immediately once you graduate.
Most of the time you will be able to negotiate lower interest rates and have only one payment to worry about every month, so see your lender as soon as possible. Remember though that to consolidate private student loans, your credit score is very important, so you will either need a co-signer or don't bother doing it if your score is lower than one you first took the loan. If you actively pursue all your options though, private student loans consolidation can save you a lot of money.
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