Consolidating private student
Private student loan consolidation can streamline repayment by replacing multiple payments with a single monthly payment.It can reduce the pressure on the borrower’s budget by reducing the monthly loan payments (albeit by stretching out the term of the loan and increasing the total payments).It can cut the cost of the loan if the borrower qualifies for a lower interest rate.One of the biggest myths when it comes to student loans is whether you can combine your Federal and private student loans. Well, since the middle of 2014, you can actually refinance and consolidate both your Federal and private student loans into a single loan with many private lenders.However, some servicers do manage both federal loans and private loans.
WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.
Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.
As you weigh the pros and cons, keep in mind that timing is critical.
Our expert tips and hacks will help you save money, pay off loans sooner and stress less about student loan debt.
Read the other posts in the series here—and get all the info you need to make intelligent decisions about your student loans.