Consolidating private student loans in default
These processes are often confused, but they’re very different.
Here’s how: Federal loan consolidation doesn’t have a credit requirement, and it offers the benefit of a single loan bill and potentially lower payments.
When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%.
Having said that, they are still a good way to reduce your monthly obligations to one manageable payments.You’re generally eligible once you graduate, leave school or drop below half-time enrollment.Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.Benefits of federal loan consolidation include: Students who have private lender loans can also take advantage of loan consolidation programs.Many private lenders offer attractive loan packages to make it easier for students to pay off their loans and avoid default.If, after graduation, you find you are having difficulty making your monthly payments or are facing a shortage of finances for the immediate future a student loan consolidation program can help you avoid default and keep your credit history on the right track. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Private consolidation is often referred to as refinancing. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. " There are two types of student loan consolidation: federal and private. We’re on your side, even if it means we don’t make a cent.Graduate students, medical students and law students are carrying much more.Consolidation loans have become common practice for both Federal and private student loan holders.