Consolidating private loans in default
Private loan consolidation Like federal consolidation, a private consolidation loan allows you to combine multiple loans into one, and offers the same potential benefits listed above. Choose a variable interest rate loan, which can be a cost-saving option if you plan to pay off your loan relatively quickly. Enjoy the benefits of consolidation, including one simplified monthly bill.However, the interest rate on your new, consolidated loan is not a weighted average of your old loans’ rates. Unlike consolidation, student loan refinancing is only available from private lenders.
But the truth is, you have more control than you think. We’ve got you covered with our Student Loan Smarts blog series.Our expert tips and hacks will help you save money, pay off loans sooner and stress less about student loan debt.This option doesn’t save you any money, but there are still a few potential benefits: 1.Fewer bills and payments to keep track of each month. The ability to switch out older, variable rate federal loans for one fixed rate loan, which could protect you from having to pay higher rates in the future if interest rates go up.
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Discounts reduce the amount of interest you pay over the life of the loan.