Consolidating student loans and private loans
Private loan consolidation Like federal consolidation, a private consolidation loan allows you to combine multiple loans into one, and offers the same potential benefits listed above. Choose a variable interest rate loan, which can be a cost-saving option if you plan to pay off your loan relatively quickly. Enjoy the benefits of consolidation, including one simplified monthly bill.
However, the interest rate on your new, consolidated loan is not a weighted average of your old loans’ rates. Unlike consolidation, student loan refinancing is only available from private lenders.
Debt consolidation won’t work if you have too much debt or haven’t fixed underlying spending issues.
Almost all lenders require you to be 18 years or older and a legal U. resident with a verifiable bank account and not in bankruptcy or foreclosure.
But what is consolidation, what is refinancing, and how do you know which one (if either) is right for you? Here’s a simple overview of the different types of student loan consolidation, how they differ from student loan refinancing, and how to evaluate whether you should do one of these things.
Knowing your credit profile before you apply can help set expectations.
Several personal finance websites, including Nerd Wallet, offer free access to your credit score and credit report.
For example, the average So Fi borrower saves about ,000. The decision depends a lot on your specific situation. Do you plan to take advantage of federal loan benefits?
Answering these questions will go a long way to helping you make the right choice.
Look for a site that offers educational tools such as a credit score simulator or guidance on how to build credit.