What is Private Student Loan Consolidation?

Now that you’ve graduated, it’s time to think about how you’re going to repay your education loans.  It could be very hard on you to handle all your monthly payments to several lenders, especially since you’re fresh out of college.  So, why don’t you consider student loan consolidation?

It can really be a good idea.  But if you have eligible private student loans that can’t be included in a federal student loan consolidation, then why don’t you go for private student loan consolidation instead?

What is it?

Private student loan consolidation will allow you to consolidate your eligible private education loans that you normally can’t include in a federal consolidation loan.  Now, consolidation is not just for federal student loans.  With private education loan consolidation, you can consolidate all your eligible private student loans into a single easy-to-pay loan at low rates. 

What benefits can I expect from it?

In private student loan consolidation, all your eligible private student loans are bundled into a single and lower monthly payment, so you don’t have to make several monthly payments to several lenders.  Also, you can extend your repayment period plan to up to 30 years.  You are given more time to repay your private student loans.  And with this, of course your monthly payments will surely decrease so you can have more available money for other expenses like housing, car expenses, and other career-related necessities.  There are also no prepayment penalties so you can pay for your next scheduled payment beforehand. 

Is there a disadvantage?

Although it sounds too good, there’s also a disadvantage with private student loan consolidation.  When you consolidate other types of loans or debts with your student loans into a private consolidation loan, you could lose some of the benefits that federal education loans carry, such as deferment eligibility or loan forgiveness options.  Also, you could risk substantially raising the overall interest on the loan. 

Where can I apply for one?

You can go online and check for websites that offer an online application that can be accomplished in just a matter of minutes.  College graduates with any existing and nationally-marketed private student loans are eligible to apply.  Through this, you can start taking a big step towards fulfilling your obligations. 
It’s really up to you to decide whether getting a private student loan consolidation is right for you.  Yes, there are some benefits but there are also some disadvantages.  It is best if you learn more about it, or ask your lender, to discuss some important details with you.  In the end, it’s your money, so you have to be careful what to do with it.