There are several options available to you when you want to consolidate private student loans.
Unlike federal student loans, which may be consolidated through federal student loan programs, you typically have to consolidate private student loans by taking out a new loan from a bank or another lending organization.
Some private lenders offer certain forms of relief to borrowers who are struggling to make their student loan payments (such as forbearance plans, repayment assistance, and other relief), but these options are available at the sole discretion of the lender. If you don’t know whether your student loans are private or federal: Each private lender has different criteria.
Most lenders require the borrower to be a citizen of the United States (or a legal resident), and to meet certain credit, employment, education, and income requirements.
When you need answers to questions about student loan debt consolidation, the credit counselors at American Consumer Credit Counseling (ACCC) are here to help.
ACCC is a nonprofit organization with certified credit counselors who are dedicated to helping you get out of debt and learn to live debt-free.
As you weigh the pros and cons, keep in mind that timing is critical.
With just a few exceptions, you get only one chance to consolidate with the government loan programs.
However, some servicers do manage both federal loans and private loans.
Direct consolidation loans are now the only type of federal student consolidation loan.
Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.
And while private loans can definitely be helpful to pay next semester’s tuition, you may find yourself wishing you’d found an alternate strategy when repayment arrives.
Private loans can be much tougher to manage than federal student aid.