By: Jeremy Kates0 comments

When it comes to consolidating private student loans, it’s important to keep in mind that you generally can’t combine them with federal student loans.

Why consolidate your private student loans?

In most cases, the main benefit of refinancing private student loans is to combine several loans into one easier to manage payment. Obviously, the borrower will look for better terms if available as well.

If you’re having trouble affording the monthly payments, you may also benefit from a longer term with reduced principal.

There is also a good chance that your financial situation may have changed. If this is the case, negotiating for better terms is a viable option. Since the interest rates on private student loans are based largely from your credit score, you may be able to get this reduced. For example, if your credit score has increased, it’s likely that you will be able to reduce your interest rate. This could have a large impact on your monthly payment as well as how much interest you will pay over the life of the loan.

In some cases, you may be able to negotiate with your current lenders and negotiate a better interest rate, but you will not have the benefit of consolidating into one payment.

What are the alternatives?

If you’re lucky enough to own a home, you may be able to use a home equity loan as an alternative as they often have similar interest rates with private student loan lenders.

Increase your odds of scoring good terms

One thing that may increase your odds of scoring the best terms with a private lender is by having a co-signer agree to work with you. Many of the private lenders will offer the co-signer to be removed from the note after a short period of timely payments.

Related post

Leave A Comment