There are numerous benefits to a student loan borrower consolidating the balances of more than one loan. First, a student loan consolidation can make the repayment process easy allowing just one payment to be made to one single lender rather than needing to make payments to different lenders throughout the month.
In addition to pure convenience, the borrower’s new payment is oftentimes lower sometimes considerably lower than the total amount of payment they were previously making. This can be due to a lower loan interest rate, a longer repayment term, or both.
As is often the case, many students are unable to obtain the total amount of student loan funds that they need through just one loan. Therefore, throughout their time in college, they may have borrowed funds from both government student loan sources as well as private lenders such as banks and credit unions. Therefore, when considering the consolidation of one’s student loans, the question remains can government student loans be consolidated with private student loans?
And the Answer Is
In most cases, the balances of private student loans are able to be consolidated with federal student loans. This is due in large part by the fact that recently lenders started to offer very attractive rates of interest that are offered to student borrowers on both federal loans and private student loan consolidations.
A private student loan consolidation is simply a process of replacing one or more private student loans with another single larger loan. This process is in many ways similar to refinancing one’s home mortgage.
In doing so, the borrower is still able to obtain the same benefits that they would have received if doing a student loan consolidation a potentially lower rate of interest, a longer repayment term, and thus a lower amount of monthly payment. However, it is important to note that federal student loans may offer you certain benefits, options, and protections that private loans don’t, such as extending the amount of time that you may need to repay your loan, or giving special considerations for members of the military. By mixing the two types of loans, you may not be able to partake in some of the federal loan benefits.
It is important to note that there are some income and credit related criteria that are necessary when refinancing one’s private student loan. In most cases, the borrower must have a certain minimum credit score, as well as an annual income of at least the amount of debt that they will be refinancing.
Where to Go to Refinance
It is important to work with a lender that is well versed in refinancing student loans. A top lender in this industry is Cedar Education Lending. Their website offers a great deal of information on how the private loan consolidation process works, as well as what steps must be taken in order to qualify.
The site also offers a student loan consolidation calculator so that a potential borrower for a consolidation can get a better estimate of what the amount of their new loan payment will be, based on the new interest rate and repayment duration.