Consolidate Private Student Loans – This is how to do it
Financially and emotionally, the pursuit for higher education can be an expensive endeavor.
However, it is a shame that it must be pursued under the looming shadow of overwhelming loan payments.
It is important to look at options available on how to consolidate private student loans.
Learn to consolidate your private student loans and keep yourself free from your life sentence meted by your creditors.
- List all your outstanding private student loans that you owe, from the highest balance to the lowest. List each interest rate, pay off amounts, loan period and payment address
- Peruse the terms on each of your current loans. Pre-payment terms may impose penalties that may make it prohibitively expensive to refinance an existing loan through consolidation with another
- Clear up your credit report. Your credit score will be the basis of your interest rate when you apply to consolidate your student loans. You need to review your credit report and make sure that there are no errors which are the common error on majority of credit reports. A closed credit card, complete payment of an existing loan and it is still listed on your credit report, can negatively affect your credit score. Be careful that all errors are corrected.
4. Why consolidate private student loans? Different student loans are pretty similar from one education lender to the other and do not compete on interest rates. In consolidating your student loan, you can accomplish it by:
5.Having a single payment instead of two or more, therefore making it easier to manage the loan.
6. Consolidating into a home equity loan will lock in your interest rate especially if one or more of your private student loans have a variable interest rate.
7. Consolidate private student loans can lower your monthly payments. The terms will be re-set and extend the amount of time you have to pay-off the loan although you will end up paying more in interest.
8.Improving credit score by 50 to 100 points can save you by consolidating since it will lower your interest rate significantly.
9.The different terms offered by different education lenders should be researched. Pre-payment penalties should be paid with particular attention. Check if the interest rates are fixed or variable. When applying with a co-signer, find out when your co-signer can be removed from the loan. Check if the associated costs such as loan origination fees can be rolled into the loan if you choose to and if additional incentives such as interest rate reduction for setting up automatic payments from your bank account can be offered by each lender.
10. Find out the pros and cons of consolidating with non-education lenders and consider applying for a personal loan from your bank or a home equity loan instead.
11. Coordinate with one of your current loan companies and check if it will agree to consolidate all loans at a lower interest rate instead of losing you as a customer.
12. Compare and make your selection from a short list of education and non-education lenders and apply to consolidate your loan.