Private Student Loan Consolidation – How to Consolidate Your Student Loans For the Best Rate
If you’re like many people, you’re probably wondering if there are any good reasons to apply for a private student loan consolidation. The truth is that there are many good reasons to do so. Private student loan consolidation allows students to take out a loan to pay off their school loans at a much lower interest rate than they were paying before. There are several reasons why consolidating private loans might be a good idea for you.
If you currently have federal student loans, you’re looking for a way to consolidate them into one single private student loan payment. In general, federal loans offer very low interest rates when compared with private lenders. However, if your private student loan payment were already disbursed by a private lender or your state, then learning the benefits of consolidating your loans would be very beneficial. Here are three benefits of consolidating your college loan payments through a private student loan consolidation company:
Consolidation lowers your monthly bill. If you currently make all of your payments on time, then you may not even be noticing lower interest rates. But if you combine federal loans and private student consolidation, you’ll be able to enjoy the lower interest rates and better payment terms that go along with federal consolidation. Many private lenders don’t have the federal loan programs available. But if you’ve been thinking about consolidating, then you probably already have federal loans.
Refinancing is easy. With a private student loan consolidation, you get a brand new loan to use with your new lender. It’s as simple as borrowing against the money that you already owe. You will have to prove that you qualify for the refinancing and that you’re enrolled at your new school. This process doesn’t take long and usually only involves filling out a quick application.
Consolidating saves you time and hassle. Once you’ve chosen which lender you want to do your refinancing with, you can work with them directly. This means that your lender will actually be handling the refinancing for you, saving you time and avoiding the paperwork involved with federally facilitated consolidation. Plus, you can choose from a wide variety of repayment plans. Undergraduate, graduate-level, federal subsidized, and private student loans can all be bundled together into one new, easy to manage loan.
Credit unions aren’t nearly as aggressive in their lending requirements as other lenders. So if you’re a student looking for a private loan consolidation, you may have a hard time finding a good deal from a credit union. But don’t give up just yet! You can find some very competitive rates from other credit unions, when you take the time to look for them. Most credit unions don’t offer refinancing loans on just any student loans, but you can sometimes find deals through your lenders when you consolidate with them. Your credit union may have special programs that enable you to combine your federal loans or private loans, or it may have an easier application process than traditional lenders.
Interest rates for federal student loans are currently at record lows, but some borrowers are worried that the interest rate for private consolidation loan might not remain low for as long. While past interest rate trends are hard to predict, borrowers aren’t too worried. The current interest rate for private consolidation loan is less than half of the average interest rate for unsubsidized federal Stafford loans. There’s even a current discount offered to borrowers who consolidate their federal debt. The discount is typically worth about $55 per month, making it a great option for borrowers who need a little extra cash for school expenses.
One important thing to remember when searching for a private student loan consolidation is that you must do your research. Many graduates are unsure of their current FICO score and what lenders look for in that number. If you know your FICO score and how it factors into your debt-to-income ratio, you’ll be able to shop for the best rates. When you search for lenders online, make sure you check out a few of the websites that offer information about interest rates and repayment terms. You can compare lenders and see who can offer you the best deal.