Benefits of consolidating private student loans

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If you consolidate your federal and private loans with a private loan provider, you may lose your chance to enroll in income-based repayment options or to apply for a deferment if you become unemployed, experience an economic hardship, or experience other circumstances.You may also lose your ability to explore loan forgiveness options, where all or a portion of your loan debt can be erased in exchange for joining the military, working in certain fields, volunteering, or moving to a specific location.But if you switched majors, transferred colleges, or went on to graduate school, you may be among the 19% that owe ,000 and above, or the 5.6% who owe more than 0,000.Chances are if you’re dealing with student loan debt, you’re not just dealing with one loan. And if you couldn’t cover the costs with federal loans, you very well may have turned to a private lender, such as a bank or other lending institution (e.g., Sallie Mae) to fund the rest of your expenses.All products are presented without warranty." Graduating from college comes with the acknowledgment of great achievement — and, if you’re like 70% of graduates, a burden on your back in the form of student loan debt.

Unlike federal loan consolidation, a private loan may carry a variable interest rate, which means it — and therefore your monthly payment — can change over time.

While you can’t combine your private student loans with federal loans into the Direct Consolidation Federal Loan, you may find that a private loan consolidation will accept your federal loans.

However, most sources advise against consolidating federal and private loans together. For instance, Discover Student Loans offers a number of repayment assistance options, including deferments, extensions, forbearance, and hardship to help borrowers repay their loans.

For more information on student loan consolidation and to determine if this option is right for you, check out our student loan consolidation guide.

If you have student loans, chances are you’re dealing with multiple interest rates, multiple loan servicers and multiple monthly payments – a surefire recipe for multiple headaches.

Here’s what you need to know: Consolidating student loans simply means combining them together, but there’s a difference between consolidating through the government’s Direct Loan Consolidation Program and consolidating through a bank or alternative lender.

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