Help with consolidating private student loans

This may be a good idea if you want a single monthly payment.You may also be able to get a better deal if, for example, your credit score is better now than it was when you first took out the private loans.(see box below), You can consolidate during grace periods.

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Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed.

Although all of these different loans may be consolidated, you must have at least one outstanding FFEL or Direct Loan to obtain a Direct Consolidation Loan.

Consolidation loan borrowers should not be charged origination fees.

If you already have a consolidation loan with either FFEL or Direct, you are not allowed to “reconsolidate’, except in limited circumstances.

As you weigh the pros and cons, keep in mind that timing is critical.

With just a few exceptions, you get only one chance to consolidate with the government loan programs.

Another common problem is that partial discharge of a joint consolidation loan under any of the discharge programs (other than death discharge) does not eliminate joint liability for the remaining balance.

Further, borrowers with joint FFEL consolidation loans, according to the Department, may not reconsolidate into Direct Loans and therefore are not eligible for public service loan forgiveness. The fixed rate is based on the weighted average of the interest rates on the loans at the time of consolidation, rounded up to the nearest one-eighth of a percentage point.

Both spouses are jointly liable for the loan and both must request IBR.

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