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Private student loanscannot, in general, be consolidated with federal student loans. The low interest rates onfederal consolidation loansare not available to private education loans. Nevertheless, there are several options for refinancing private education loans.
Since most private education loans do not compete on price, a private consolidationloanis merely replacing one or more private education loans with another. So the main benefit of such a consolidation is obtaining a single monthly payment. Also, since the consolidation resets the term of the loan, this may reduce the monthly payment (at a cost, of course, of increasing the total interest paid over the lifetime of the loan).
However, since the interest rates on private student loans are based on yourcredit score, you may be able to get a lower interest rate through a private consolidation loan if your credit score has improved significantly since you first obtained the loan. For example, if you’ve graduated and now have a good job and have been building a good credit history, your credit score may have improved. If your credit score has increased by 50-100 points or more, you may be able to get a lower interest rate by consolidating your debt with another lender. You can also try talking to the current holder of your loans, to see if they’ll reduce the interest rate on your loans rather than lose your loans to another lender.
Home Equity Loans
Private education loans tend to have interest rates that are in the same ballpark as home equity loans. If your private education loan has a variable interest rate, you might consider using a fixed rate home equity loan to pay off the private education loan, effectively locking in the interest rate.
Education Lenders
The following education lenders will consolidate private education loans. These are private consolidation programs, so the interest rates are dictated by the lender, not the government. There may be additional fees charged for originating these loans.
You should not consolidate your federal student loans together with your private education loans. They should be consolidated separately, as the federal consolidation loans offer superior benefits and lower interest rates for consolidating federal student loans.
When evaluating a private consolidation loan, ask whether the interest rate is fixed or variable, whether there are any fees, and whether there areprepayment penalties.
Featured Consolidation Providers
Credible makes it quick and easy for borrowers to save on their personalized prequalified rates. Credible offers a multi-lender marketplace that enables borrowers to receive competitive refinancing offers from its vetted lenders. Users complete a single form, then receive and compare personalized prequalified rates from numerous lenders and choose which best serves their individual financial needs. Credible is fiercely independent, committed to delivering fair and unbiased solutions in student lending.
5.28% FixedAPR (with autopay)* and 5.28% Variable APR (with autopay) *Read rates and terms at Credible.com
Lenders Include:
- Citizens
- EDvestinU
- ELFI
- INvestEd
- LendKey
- MEFA
- RISLA
Disclosure: Please be advised that the operator of this site accepts advertising compensation from companies that appear on the site, and such compensation may impact the location and order in which the companies (and/or their products) are presented.
Consolidation Providers
Please be advised that the operator of this site accepts advertising compensation from companies that appear on the site, and such compensation impacts the location and order in which the companies (and/or their products) are presented.
Additional Lenders (listed alphabetically). Check the individual lender websites for programs and rates.
FAQs
No Standardized Forgiveness: Private student loans do not have standardized forgiveness programs like federal loans. Forgiveness is rare and typically only available in specific situations. Limited Forgiveness Options: Private loan forgiveness may occur in cases of permanent disability or death of the borrower.
Is it a good idea to consolidate private student loans? ›
Consolidating multiple private loans into a private consolidation loan may be a good idea if you get a better rate and prefer one monthly loan payment. Private loan consolidation combines multiple existing private student loans into one larger loan, refinancing your original private student loans with a new loan.
Will fafsa consolidate private loans? ›
Private education loans are not eligible for consolidation. Direct PLUS Loans received by parents to help pay for a dependent student's education cannot be consolidated together with federal student loans that the student received.
Can you be denied student loan consolidation? ›
You can be denied a student loan consolidation for different reasons, such as a low income, too much debt, or a low credit score. A low income might signal to a lender that you don't have enough money to cover a new loan. Too much debt signals the same thing and that you might not be able to handle debt.
Can I convert my private student loans to federal? ›
Since private student loans come from private financial institutions, it's not possible to transfer private student loans into federal ones. However, it may be possible to get some federal-like benefits on your private loan, such as forbearance if you run into financial hardship.
How to get private student loans discharged? ›
Key Takeaways
- Private student loans are only forgiven when the borrower becomes permanently disabled or dies.
- Your relief options will depend on your lender and loan agreement. ...
- Other options include deferment or forbearance, refinancing, applying for repayment assistance, negotiating with your lender and bankruptcy.
You might lose borrower benefits such as interest rate discounts, principal rebates, or some loan cancellation benefits associated with your current loans. Consolidating your current loans could cause you to lose credit for payments made toward IDR plan forgiveness or PSLF.
What is the catch if you consolidate your student loans? ›
When loans are consolidated, any unpaid interest capitalizes. This means your unpaid interest is added to your principal balance. The combined amount will be your new loan's principal balance. You'll then pay interest on the new, higher principal balance.
What are 5 drawbacks to private student loans? ›
The Cons of Private Student Loans
Most private student loans do not offer income-driven repayment plans. Private student loans do not qualify for teacher loan forgiveness or public service loan forgiveness. Private student loans have limited options for financial relief when a borrower experiences financial difficulty.
How long does it take to consolidate private student loans? ›
From there, the process of consolidation takes approximately six weeks. Borrowers can check the status of their application at StudentAid.gov. Until the consolidation process is complete, you must continue to make payments on your current loans.
Consolidating private student loans
You typically need a credit score in at least the high 600s to qualify, and average interest rates for a refinance range from around 5% to more than 9%. Consider private student loan consolidation if you have: Existing private student loans.
Will Sallie Mae let you consolidate? ›
We don't offer consolidation or refinancing at this time. We recommend that you consider the impact that these actions may have on your student loan benefits and Total Loan Cost.
Can my student loans be forgiven if I consolidated? ›
Federal student loan consolidation
If you consolidate non-Direct Loans into a Direct Loan consolidation, you gain access to protections and benefits available on Direct Loans, such as Public Service Loan Forgiveness (PSLF), which can eliminate the balance of your Direct Loans after 120 qualifying payments (10 years).
Why am I being denied for consolidation loan? ›
Insufficient credit history or poor payment history can also lead to a denial of a debt consolidation loan. Remember, your payment history is the most important factor in your credit score, comprising 35% of your FICO® Score. Even one missed payment can damage your score.
Do consolidation loans hurt your credit score? ›
Debt consolidation can negatively impact your credit score. Any debt consolidation method you use will have the creditor or lender pulling your credit score, leading to a hard inquiry on your credit report. This inquiry will decrease your credit score by a few points. However, this credit score decline is temporary.
How does consolidation affect student loan forgiveness? ›
If you consolidate a HEAL loan by June 30, your new consolidation loan will get credit toward IDR forgiveness for the oldest non-HEAL loan it includes. If you have HEAL loans only, you should still consolidate them if you want to access IDR plans or PSLF.
Can navient student loans be forgiven? ›
Navient loans can be forgiven after 20 years if they are federal student loans repaid under an IDR plan. The forgiveness applies to loans received for undergraduate study, while loans for graduate or professional study or Parent PLUS Loans may be forgiven after 25 years.
Will private student loans settle? ›
Your private student loan settlement options depend on your lender. Some lenders might require you to pay at least 90 percent of your loan, while others might be more lenient and accept less. The longer you go without making a payment, the less you might need to pay when you request a student loan settlement.
Do private student loans qualify for save? ›
You will automatically be enrolled in SAVE. Learn more at studentaid.gov/save. Private loans (i.e., non-federal loans) are not eligible for SAVE — but there may be other lower-cost repayment plans that work for you!
