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Can private student loans
be consolidated with federal student loans?
No. By
combining federal and private student loans, you would
lose out on many of the benefits of your federal loans
including the ability to place your loan into a
deferment or forbearance status, as well as the low
federal interest rates.
What interest rate
can I expect when I consolidate private student loans?
Private student loan interest rates aren’t regulated like those for
federal student loan consolidation. Instead, private student loan
interest rates are based on an index plus a percentage determined by
your credit score. It may be possible to obtain a lower rate on a
private consolidation loan with a cosigner or guarantor on the loan.
What other options are available for consolidating
private student loans?
There are far fewer options for consolidating private student loans
than with federal student loan consolidation. Many borrowers choose
to consolidate their private student loans through a home equity
refinance. For borrowers with variable interest rate private student
loans, consolidation through a home equity loan can offer a fixed
percentage rate and extended repayment terms.
Refinance federal
student loans first
Because private student loans don’t have the same consolidation
benefits, most experts strongly recommend refinancing federal
student loans before attempting to consolidate private loans. Since
most borrowers use federal student loans to fund the majority of
their education and obtain private loans only to fill in the gaps,
refinancing federal loans now may give you the relief you need.
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