Private School Loan Consolidation

One of the greatest obstacles in obtaining a college education is the high cost of tuition. Add to that the cost of dorms, books, transportation, food and other expenses, and the cost of a college education is unattainable for many students without the help of college student loans.

Private school loan consolidation is the process of combining multiple private student loans into a single loan. The main purpose of obtaining a private school loan consolidation is to reduce monthly payments with a lower interest rate and longer payment terms (10 to 30 years). You can also expect to get a fixed rate with your consolidation loan.

If you have borrowed more than $5000 in private loans or if your existing student loan debt exceeds 8% of your income, you should consider private school loan consolidation.

Private School Loan Consolidation - Factors

You should consider the following factors before making a final decision on loan consolidation:

Total loan payments per month

Lenders

Interest Rates (fixed vs variable)

Credit History

Payments remaining on original loans

For some students, the main benefit in private school loan consolidation is the ease of managing a single monthly payment rather than juggling multiple student loans. While private school loan consolidation will lower your monthly payments, it will also extend the terms of the loan and therefore increase the overall amount of interest paid over the life of the loan.

You have to decide is which works best for you - lower payments over a longer period or getting out of debt earlier by paying off your original loans on time.

Private School Loan Consolidation - Lendors

Before applying for a private consolidation loan, research all of your options such as banks, credit unions and online lenders. Online lenders tend to have better offers on lower interest rates. You can also ask your current lender if they will offer you a lower interest rate to keep your business.

Private School Loan Consolidation - Credit History

Interest rates on private school consolidation loans are based on your credit score. It's important for you to check your credit history before applying. It's common for errors to exist on credit reports.

If you find an error, you should contact the credit bureau and request the error to be fixed, in advance of applying for the private school consolidation loan. In some cases, it can take about two months to resolve issues on you credit report

Private School Loan Consolidation - When to Consolidate

Many school loans feature a grace period after you leave college or graduate. This period can be anywhere from six to nine months and allows a student to get settled into a career before the debt becomes due.

It's best to wait until after the grace period to consolidate your private student loans, as it will allow you to get a good perspective on your financial outlook for the next few years.

Lastly, weigh all of your options and conduct thorough research to find out the best way for you to obtain private school loan consolidation.