Consolidation For Private Student Loans

Consolidating Private Student Loans

The first question that comes to mind when someone hears consolidation they think about the term consolidation loan. However, there are many different ways to consolidate private student loans besides taking out a consolidation loan. You may not realize this, but you have several options that could help you save money and reduce your monthly payments and interest rates. One option is to take out a home equity line of credit (HELOC). Another option that some people don’t know about is the Department of Education (DOE) Direct Loan program. These programs offer consumers many benefits including lower interest rate, no prepayment penalties, and no origination fees.

Benefits Of Consolidation

When you consolidate your private student loans, you’re essentially combining the debt into one debt payment plan. By consolidating your loans, you’ll decrease the total amount of interest charged, as well as the number of monthly payments you have to make. If you decide to use a consolidation loan, you’ll pay less interest over time if you don’t start paying back the loan right away.

Home Equity Line Of Credit (HELOC)

A HELOC is basically a revolving line of credit where you borrow funds against the value of your home. You may be able to use any unused balance of your home’s equity as collateral for the line of credit. Interest accumulates at the prime plus 1%. Once you’ve paid off the entire balance, you’ll owe no additional interest.

DOE Direct Loan Program

The DOE direct loan program was created to encourage students to attend college; however, anyone who takes advantage of these benefits should make sure to do their research before pursuing this path. When applying for this program, you’ll need to submit a FAFSA application.

Pros And Cons Of A Consolidation Loan Or A DOE Direct Loan

Pros

Lower monthly payment

No prepayment penalty

No origination fee

No closing costs

Consolidation For Private Student Loans

This video was created as a public service announcement sponsored by the Consumer Financial Protection Bureau (CFPB) to educate borrowers about their rights regarding consolidation loans and how these loans might affect their credit rating.

Tags: Consolidation Loan, Private Student Loan, Private Student Loans, Private Students Loans, Private student loans for bad credit, private student loan forgiveness, consolidation private student loans, consolidate my private student loans, consolidate private student loans with bad credit, consolidate student loans for bad credit

Sources:

Consumer Financial Protection Bureau Official blog

Consolidation For Private Student Loans

We are about four weeks into 2016 and I am still trying to find ways to consolidate my private student loans. As a result, I have become extremely frustrated with myself. I know that this information should not be difficult to obtain, especially since private lenders have been doing this for years now. However, being a student loan borrower I feel like I am the only person who does not understand how to do this properly. I have even tried calling customer service numerous times and they just simply ask me if I need assistance finding a consolidation program. But, no matter what I try to do, I never seem to get anywhere. So, here I am again asking…how can I find a way to consolidate my private student debt?

Here’s What You Need To Know About Private Student Loan Consolidation:

You have many options out there for private student loan consolidation programs. These companies offer different products, features, and services. Each company has its own guidelines and requirements for consolidation. If you decide to go with a specific lender, make sure that you know exactly what you are signing up for.

When looking for a company to consolidate your private student loans, start off with online research. Find websites that offer reviews and ratings on each lender and compare them side-by-side. Also, look at their rates and fees to help determine which one fits best with your budget.

Once you have narrowed down your list to two or three lenders, you can visit their websites directly and fill out some applications. Be prepared for a long application process. Make sure that you understand all of the terms and conditions before you sign anything.

After you submit your application and pay the necessary fees, you will receive confirmation of acceptance or rejection. Always read everything thoroughly. If you are accepted, you may be asked to provide additional information before consolidating your private student loans. You will then be given a date to send payment for the entire amount.

As soon as you send in your payment, your account will be reviewed. Then, your private student loan will be consolidated and the total amount paid will be added to your monthly payments.

If you would prefer to use a direct lender, you cannot apply online. Instead, you will have to call the number provided on your loan agreement and speak with a representative. In addition, you will have to meet certain criteria. Usually, you will need to have good credit, high income, and a stable employment history.

Even though you do not qualify for a traditional loan under these circumstances, you may still be able to refinance through a tax advantaged savings plan. Check with your financial institution to see whether they allow for private student loan refinancing.

Remember that private student loan consolidation is not always the right choice for everyone. There are several reasons that people choose not to go through with it. One example would be if someone is unemployed, has low income, and already has enough funds put away to cover their debts. Another scenario could be if a borrower has taken advantage of private student loan forgiveness programs.

If you are having trouble paying back your private student loans, we recommend contacting a nonprofit organization that provides free debt counseling. You might also want to consider seeking bankruptcy protection to protect yourself from further harm. Finally, keep in mind that private student loan consolidation should NEVER be done without first consulting your financial adviser.

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Consolidation For Private Student Loans

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