Private student loan consolidation is something that can help just about everyone. It does not really matter what type of loans you originally took out for your education, or what the terms of those loans were. In fact, it may surprise you to learn that the state of your loan makes little difference in consolidation.
Who Qualifies for a Private Student Loan Consolidation?
Private student loan consolidation benefits you whether you are a student, graduate, or drop out. Whatever status your current loans are in, you are able to obtain a private student loan, so long as your credit or co-signer’s credit is good enough. If you are a student, you can lower the amount of interest and finance charges racking up while you are still in school. If you are a graduate or drop-out, you can lower your payments or even receive an economic deferment based on your income.
Benefits received from private student loans consolidation are most clear when comparing average interest rates over the last several years. The average interest rate nationally over the last four years has been about five to six percent. However, federal student loans can carry up to 8.5 percent fixed interest. Therefore, by consolidating your loans you can significantly cut the cost of obtaining the loan.
Consolidation Makes it Easier to Manage Many Student Loans
Private student loan consolidation holds another benefit that is little considered by today’s students. Life as a student can be rather difficult financially, and require some credit card debt in addition to student loans. Through private student loan consolidation you may have the opportunity to consolidate some of this additional debt as well, further saving money and consolidating your debt to one lender and one monthly payment. These options are not available through traditional loan consolidation offered by the government.
While there are some downsides to private student loan consolidation, such as a variable interest rate, you will likely find that the benefits far outweigh the cons to consolidation. Private consolidation holds so many more benefits than federal consolidation, it often makes great sense for most students – it never hurts to shop around for the best deal!