Academic debt of varying types will mount up quickly as you work your way through college. Consolidating private student loans is one way to manage this debt. There are many benefits to this option.
Private student loans are the hardest to maintain because they are not only unsubsidized, they are typically based on your own personal credit. These loans may or may not be on an academic deferment, where you don’t have to make payments while you attend school. They likely have higher interest rates than your other student loans as well.
There are many benefits to consolidating private student loans. First, by consolidating several loans into one lump sum amount you save a lot of money on finance charges. You may also be able to obtain a lower interest rate, especially if your private loans are on a fixed rate and were obtained when rates were higher.
If your private student loans are not on an academic deferment it can be very difficult to make payments while trying to get your education. This is especially true for working parents going back to college for a degree. The easiest way to get these loans on an academic deferment and stop making payment during school is to consolidate. You do not have to graduate in order to consolidate you loans. Consolidating private student loans is feasible and recommended even while you are still in school.
Consolidating private student loans is rather easy. Once you find a reliable lender to work with, you need only make application for consolidation. You will need basic personal information such as income, as well as information relating to your current student loans. This information will include the lending institutions, the amount of the loan and the interest rate. A credit check may be required as well, but in many cases it is not necessary.
In many cases you can consolidate other unsubsidized student loans with the private loans to make debt management even easier. Whether or not this is possible depends on the original lender, the lender doing the consolidation, and the terms of the original loans. Subsidized loans can be consolidated after graduation, but typically cannot be consolidated with other types of loans.
Once you have consolidated your private student loans you can begin working toward managing your academic debt more efficiently. Remember that while the consolidated loan may be placed on academic deferment, it is essentially the same as an unsubsidized loan. This means that interest accumulates even though you are not required to make payments. To best manage your academic debt from this point, you need to pay the interest accrued monthly, even if you are not paying on the principle of the loan. This can greatly decrease your chances of having to consolidate private student loans in the future.