Federal loan consolidation The U

Consolidating private college loans

Education Lenders The following

Usually, the biggest chunk of debt is owed to the U. 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. Hard credit inquiries or hard credit pulls are required for SoFi to be able to issue you a loan.

Nevertheless, there are several options for refinancing private education loans. Federal loan consolidation The U. The low interest rates on federal consolidation loans are not available to private education loans.

Department of Education in the form of Federal Direct subsidized and unsubsidized loans. 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 points or more, you may be able to get a lower interest rate by consolidating your debt with another lender.

In addition to requiring your explicit permission, these credit pulls may impact your credit score. Unlike hard credit inquiries, soft credit inquiries or soft credit pulls do not impact your credit score. Since most private education loans do not compete on price, a private consolidation loan is merely replacing one or more private education loans with another.

When evaluating a private consolidation loan, ask whether the interest rate is fixed or variable, whether there are any fees, and whether there are prepayment penalties. They should be consolidated separately, as the federal consolidation loans offer superior benefits and lower interest rates for consolidating federal student loans. Dept of Education allows students with multiple federal loans to consolidate these loans relatively easily. In many cases, students can also qualify for a lower rate by refinancing, which will save them money over he life of the loan as they pay lower interest.

One benefit of refinancing your student

But, there are some drawbacks. 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. 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. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

Home Equity Loans Private education loans tend to have interest rates that are in the same ballpark as home equity loans. Not all borrowers receive the lowest rate. There may be additional fees charged for originating these loans. These are private consolidation programs, so the interest rates are dictated by the lender, not the government. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front.

Education Lenders The following education lenders will consolidate private education loans. One benefit of refinancing your student loan debt is that many lenders will give you the option to consolidate your federal loans with any private loans to have one, single payment. You should not consolidate your federal student loans together with your private education loans.