Fed Financial

What kind of loan can I get to consolidate private student loans?

I have $100,000 in private student loans from two lenders. The interest rate is over 10%. Is there a way to get another loan to pay this off at a lower interest rate? What kind of debt consolidation program should I consult? Most student loan companies only deal with Federal loans it seems. I keep seeing ads for mortgage loans with low monthly payments-- is there something similar I could get for a personal loan? THANKS!

Public Comments

1. You know what my answer to this problem is? I am joining the Marine Corps. I'm gonna be programming. There are plenty of different jobs in the Corps other than just killing ppl. So if I were you I'd go to marines.com and search for your nearest recruiter to see what they could do for you. What do you have to lose by talking to a recruiter. Nothing.
2. You're right, there are a lot more companies that deal in federal student loans than there are companies dealing in private student loans. However, this is changing. As tuition rises and the student loan debt increases, companies have responded to the need for private loan consolidation. Sallie Mae -- one of the biggest names in student loans -- introduced a private loan consolidation product within the last year. I would encourage you to read up on the various companies that offer private student loan consolidation and pick one that you're comfortable working with long term. Among the reputable companies I've found who offer this service are... Sallie Mae: http://salliemae.com/after_graduation/manage_your_loans/consolidate_student_loans/private.htm Key Bank: https://www.key.com/html/H-1.39.b.html Education Finance Partners: http://www.educationfinancepartners.com/loans_privateconsolidationloan.html Wells Fargo: https://www.wellsfargo.com/student/repay/private_consolidation/?_requestid=13154 Nelnet: http://www.consolidation.nelnet.net/PvtDescription.asp You can look into *other* types of loans as well. When home equity loan rates plummeted, a lot of borrowers jumped on that bandwagon and took out a home equity loan which they then used to pay off their student loans. The best part? There is no limit to how much home equity loan interest you can deduct on your taxes, while there is a limit to how much student loan interest you can deduct. If you own a home, you can look into this option. If you don't own a home yet, you can keep this option in the back of your mind. You can always take out a home equity loan later on and use it to pay off whatever private consolidation loan you decide to obtain today.
3. Consolidating your student loans can be one of the best financial decisions you can make for your overall financial health. By reducing the number of payments you make each month you can not only lower your total payment per month, but you can also take advantage of lower interest rates which can save you a considerable amount over time. One of the first steps in consolidating your student loans is to choose a lender who will handle your account and service the loan. When evaluating consolidation lenders there are several factors you should consider. Doing your homework in this area can save you headaches later as you can choose which consolidator works best for your particular situation. Some of the criteria you should use when choosing a lender include: Interest Rate. This is the biggest factor you should consider when consolidating your student loans as it is what will save you the greatest amount of money over the long run. Student loan consolidators are highly competitive, but even a variance of a quarter of a percentage point can mean big bucks if you have a large balance and many years to go before you have the balance paid off. Know what the current market rates are and use this as a leveraging point when talking with lenders. Payment amount. Your payment amount will be determined by the length of time you repay the student loan and its total balance. Some lenders offer longer repayment terms than others. If you are concerned with the monthly payment amount and have a strict budget to stick to you will want to find a lender who offers an extended repayment period that can meet your budgetary demands. Payment types. Getting your student loan consolidation payment to the lender on time is crucial for paying off the balance. Make sure you choose a lender who offers flexible payment options, such as online billing and direct debit. Some lenders still insist that payment be made by check - something that can easily be overlooked at times that could mean penalties and higher interest rates. History of the lender. Not all lenders are created equal, and some can seem too good to be true because they are. Use the power of the Internet to research the lender you want to go with to find out the experiences of others and how they are servicing the loans. Beware of upfront fees. Most student loan consolidators do not charge a fee for consolidation. If you are presented with a fee for the loan ask what it is for upfront. Don't rush it. Never sign anything without taking you time to read over all the agreements and taking the time to look everything over. If a lender is rushing you to sign they may not be disclosing everything to you. Ask for all agreements and paperwork upfront - never take their "word" for anything! By being an informed consumer you can find a consolidator who will work with you to make your repayment process easy and affordable. Many student loan consolidation lenders are there to work for you, not against you. By taking the time upfront to research all your options you can make a more informed decision for one of the larger financial transactions of your life.
4. Good advice from FinAidGrrl....the only thing I would add is that private consolidation loans are credit-based, meaning the interest rate charged will depend on your credit history, so anything you can do to raise your credit score *before* you consolidate might get you a lower rate.