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Private Student Loan Consolidation Custom Search Private student loan consolidation is different from the federal ones which have low interest rates. So bear in mind that the latter type of loans are not available to use to refinance private education loans. But have no fear because there are different ways to refinance education loans. There are advantages to private student loan consolidation.
The process is simple. Different loans are put together as one and there will be a single payment. Also as noted above, the monthly payment will be reduced. There will be no variable interest rate if the loans being consolidated qualify. One does not have to watch for changes of the interest rate in the market. The interest rate stays the same throughout the life of the loan.
As one can tell from the aforementioned benefits and since there is no price competition on private education loans, a private student loan consolidation just takes the place of one or more education loans with the benefit of having to pay one single monthly payment. Due to the resetting of the term, the monthly payment is reduced but bear in mind that this will increase the total interest over the life of the loan. Now another point to consider here is the fact that since the rates depend on one's credit score, one may be able to obtain a lower interest rate. One good example of this is if the student concerned has graduated and landed a job, then he may have improved his credit rating which then will enable him to negotiate a lower interest rate. What increase will qualify one for a lower interest rate? I thought you'd never ask. An increase of 50 to 100 points in the credit score may enable one to get a lower interest rate. Talk to the present lenders first. They may reduce the interest rate especially if they know you're shopping for a new lender. Here are the loans that can be consolidated into one private student loan consolidation program:
There is a caveat here. One should not include the federal student loans in the private student loan consolidation plan Why? Because they have better benefits and lower interest rates. There is no better rate one can obtain. This type should be consolidated separately from the other loans due these two reasons. Evaluate each private student consolidation plan. Make sure to ask if the interest rate is variable or fixed. Ask also if there are fees involved. If so how much are they? They should be a one time fee. Asking if there are prepayment penalties is also a good idea. Write all these down and get them in writing signed by a leading member of the firm.
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