Re consolidating private student loans

03-Nov-2014 11:21

re consolidating private student loans-79

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Regardless of how the market fluctuates, borrowers will never pay more than 8.25 percent on their consolidation loans.

Private loans can typically only be consolidated with other private loans.

After consolidating his or her loans, a student borrower will have just one monthly payment and just one loan balance to maintain.

The decision whether or not to consolidate can be tricky.

Once the application is submitted, the federal government estimates that it takes 60 to 90 days to officially complete the consolidation process.

Consolidating private loans works in a similar fashion, as far as paperwork goes.

Unlike federal loans, it can be trickier to get your private loans consolidated.Federal loan borrowers can also lower their monthly payments by extending the life of their loan, having their payments capped according to their income and by having their debt dismissed after making 25 years of consecutive payments under the income-based repayment plan.But borrower protections and repayment options on private consolidation loans can vary wildly from lender to lender.Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D.

C."That new loan will have its own interest rate; it will have its own repayment terms; it will have its own terms and conditions," she says.

Student loan consolidation is a relatively easy concept to understand: it is the process of taking multiple student loans and combining them into one.