Private student loan consolidation is an excellent way to combine all previous student loans of $5000 or more into one larger loan with lower interest rates. This helps budget management because the student needs to track just one loan payment instead of many. If the borrower does not have an excellent credit rating, having a co-signer is highly recommended for obtaining these loans with lower rates.



While private loans do not carry the lowest interest rates of the federal programs, low rates can be available for those persons with superb credit or who have co-signers with excellent credit records.

Private Student Loan Benefits
There are many factors that make private student loans attractive. These include:
1. Lower Monthly Payments – extended repayment terms result in lower monthly payments
2. Reduced Interest Rates – improved credit can result in lower rates
3. Rate Reductions – superior credit ratings for borrower or co-signers results in lower interest rates
4. Repayment Term – up to 25 years for undergraduates or 30 for graduates
5. No Prepayment Penalties – all excess payment amounts are applied to principal

Private versus Federal Student Loans
Private student loan consolidation is different than federal student loan consolidation. If a student chooses to consolidate their federal loans into a private loan, they will lose any federal loan benefits. While federal student loans may be consolidated into private student loan consolidation loans, the reverse is not possible. Students cannot bring private loans into a lower interest federal loan consolidation plan.

Special private loan programs to encourage students to further their education offer an opportunity to achieve educational goals that will benefit those students for a lifetime.