When you are through with your college and need to go for further education, you may decide to go for private loans as the one provided by the government is not enough. Lenders will offer you these loans to support you in pursuing your higher education but at higher interest rates than government loans. This is because they consider these loans as unsecured. When the time comes for you to start paying back, it becomes a challenge, especially if you have a number of them. This situation makes the decision to consolidate private student loans the best option for you.
Prerequisites for Consolidating Student Loans
Check your credit rating by looking at your financial reports. Interest rates charged on these loans are dependent on your credit score. You can get a free credit report and know your status. Lenders you find in our network already understand your poor credit score and will not be focused on that.
- Research and compare the lender. You will find consolidating your student loans with a private lender to be much affordable and favorable compared to banks and credit unions. Compare lenders and identify the differences that can greatly influence your repayment.
- Take your time to carefully check the terms and conditions of a lender. Our lenders are always willing to assist you. Your questions should be about interest rates, payment options, penalties and fees.
Checklist for Your Consolidation
Know your lenders: contrary to government student loan consolidation, private consolidation charges different interest rates on your loans. The rates charged depend on the current rate in the market. Therefore, when the market rate is low, you are assured of getting very low rates and vice versa.
- Ensure that you have evaluated and understood your financial needs. Private lenders have varying benefits for loans that you consolidate with them. You may find a lender offering a slightly higher interest but that will be accompanied by higher fees.
- Be careful when you want to consolidate private student loans from a lender. This is to avoid signing up for a loan that will make your situation worse. We will be linking you to lenders who have a wide range of options for different financial situations. You will be dealing directly with a lender and that is why you are assured of affordable interest rates.
- Understand the extra charges and penalties that you might incur while dealing with a lender of your choice. When consolidating your student loans, it is important to be clear about the extra costs. Some lenders may charge you for an upfront service fee while others may charge you a processing fee for credit history check. This is why it is also important that you get your credit report beforehand.
- There are other lenders who may charge you a pre-payment penalty. Lenders in our network want you to clear their loan as fast as you can. They are focused on helping you complete your loan debt and be eligible for loans after you are through with your higher education. Remember that after college, you will still need access to financing hence the need to have a good credit profile. Your pre-payment will work positively towards creating a good credit profile.
- A reputable lender should be able to provide you with an alternative when you are late with a payment. You need to choose a lender who understands the ever-changing economic times and create a plan in case you default a scheduled payment.
- Remember that lenders are running a business and they are competing. Lenders working with us have regular promotions that will make your loan process even much easier. They have incentives that will also let you save more in the long run. You are free to ask your lender about any current promotions so that you are not left out.
Benefits of Consolidating Student Loans
There are various benefits associated with student consolidation loans. These include:
- The main benefit of consolidating these loans is the opportunity to have one loan instead of several loans. Therefore, you will only be required to pay one monthly payment. You will be having a chance to choose the lowest payment plan especially if you are looking for a long-term plan.
- The interest rate on these loans may be variable or fixed. Even though they might be higher as compared to other loans, they are worth it. You will not be required to provide collateral.
- Traditional lenders will look at your credit rating that actually will not be good. On the other hand, lenders we connect you to will be providing you with consolidation loans to significantly improve your credit rating.
- Do not be in a hurry to choose a lender. Take your time and go through the reviews to find the most suitable lender. Remember that your problem is a unique one and you will only be successful if you choose appropriately. You will be choosing based on your need and your current financial profile. Note that you might be out of college and therefore, you have no source of income. This should play a major role in the consolidation decision you are about to make. When you consolidate your loans, you are actually getting a heavy financial load off your back. Making payments to different companies is quite challenging. You may forget one and then be listed as a defaulter. You do not want to be listed as a defaulter because it will hinder your future financial credibility.
- With consolidation, you will be able to complete your studies stress-free. When you choose lenders in our list, you will find out that many students have used these loans to get out of their multiple loans.
- Consolidate private student loans to achieve a similar objective as consolidating government loans. You need to check time, your private lender and loan amount. Your solution is to choose consolidation and have your loans cleared without any paperwork and delayed approval.