By far the biggest mistake I made when it comes to college financial aid was taking out some private student loans. If you do not have any of these, then consider yourself to be very lucky.
However, if you are the unfortunate owner of some private student loans from college, then you might be looking for ways to ease the pain you experience each month making those monthly payments.
Unlike those Stafford and parent PLUS loans, it is not quite as easy to consolidate private student loans. Sure, it can be done, but only if you can find a private lender that offers it and if your credit score is pretty decent.
How To Consolidate Private Student Loans
If you have some Stafford or PLUS loans, you might be surprised to learn that you cannot consolidate your private loans with them. That’s right, you can only consolidate private loans with other private loans.
Know what that means? Private loans do NOT qualify for those attractive, small interest rates for consolidation loans. I know, cue your tears now.
The good news is that you still might be able to consolidate your private loans. You just need to find a lender who offers private loan consolidation loans and apply through them.
The bad news is that you won’t get a super low interest rate and you might not even qualify for the private consolidation loan if you do not have good credit.
And, the only real benefit of consolidating your private student loans is getting a single monthly payment. Sad, huh?
Now, you might end up with a lower monthly payment since the consolidation resets the term of the loan. However, this is at the cost of more spent over the long term life of the loan repayment, so it is not exactly a good thing for your finances.
Alternative Ways To Consolidate Private Student Loans
You do not have to specifically seek out a student loan consolidation loan to bundle up those loans into one monthly payment. In fact, you can approach it from a couple of other angles.
Do you own your own home? If so, your best financial bet just might be to take out a home equity loan and use it to pay off your private student loan balance. You’ll likely get a better interest rate this way and no longer have to worry about those dumb private student loans.
You can also take out a general debt consolidation loan at your local bank or credit union and use it to pay off your private student loans. However, if your credit is not that good then you might end up with a higher interest rate with this method. So, only try this if you have a good credit score. Of course, you can always apply for the debt consolidation loan and see what kind of interest rate you get. And if it is not a good one, then cancel the loan.
Education Lenders Who Consolidate Private Student Loans
If you want to try your luck consolidating your private student loans with an education lender, then the list below in come in good use. You see, not all education lenders will do this type of consolidation.
So, look over the lenders below and determine if one is a good fit for you.
- Cedar Education Lending Private Student Loan Consolidation
- cuStudentLoans.org cuGrad Private Student Loan Consolidation
- DEAL Consolidation Loan
- Independent Community Bankers of America (ICBA)
- NextStudent Private Consolidation Loan
- SoFi Student Loan Refinancing
- Student Loan Network Private Loan Consolidation
- SunTrust Private Loan Consolidation
- Wells Fargo Private Consolidation Loan
If you apply for a loan through any of these lenders, remember to inquire about any fees that you may incur. This includes origination fees and pre-payment penalty fees.
Unfortunately, my credit score is not good enough for me to consolidate my private student loans, and I do not own a home to go the home equity loan route, but I do hope that this information can help you with consolidating your private student loans.