Private student loan consolidation can be described as the private student loan which refinances the multiple education loans into the single new loan. It is refinanced with new interest rates and repayment plans. Moreover, it offers the amount to be paid every month. However, this result in the low-interest rate and low every monthly payment. If you increase the time of repayment, then this will lead to increase the total cost in the life of a loan.
There are some eligibility criteria which should be met before asking for private student loan consolidation.
• You need to be at least 18 years old or more while applying for it.
• You will be passing a credit check.
• The aggregate student loan should not be more than 150000USD. Otherwise, the fields of study can be specified.
• You need to have a reliable income source to overcome your debts and good repayment history.
• You need to be the primary borrower of the loans, which you want to consolidate.
• You can consolidate the aggregate amount of the debt of your education loan. The minimum amount of consolidation is 5000 USD and for the maximum amount, a limit may apply.
Generally, for private student loan consolidation, you can choose one, many or all the eligible student loans. It is recommended that you should compare your current loan terms and consolidation loan terms. Because you may have some loans which are at lower interest rates than the consolidation loans.
There are many students’ loans which are not eligible for the consolidation.
• Loans for the K-12 education.
• Postgraduate’s loan like residency loans, bar exam loans, etc.
• Loans which were not used for the qualified education expenses.
• Loans were taken out while it was enrolled for less than the half-time.
• Loans which are serviced or originated outside of the USA.
Before the consolidation is complete, you will have 30 days from approval to accept the loan terms. You will also get the three-day right to cancel the loan period following the final disclosure. Once the loan is disbursed and the repayment of your existing loan has been made, then the process cannot be reversed.
Some important points to ponder upon for private student loan consolidation
• If the previous consolidated loan solely pays off the qualified higher education expenses, then you can include it in the current consolidation loan. However, it is required that it meets the minimum loan amount of 5000 USD.
• Also, if you have approved the disclosure of current student loan consolidation and accepted the terms, then no new loan can be added. If you want to add it, then you need to cancel the existing application and reapply for the additional loan.
• Once you apply for the student loan consolidation, it processes from 30 to 45 days. During this time, the credit review process is completed. In addition, you will be required to sign the loan documents and, you will obtain a payoff statement by your current loan servicer. And depending on your availability a schedule call can be arranged for you and your current loan servicer in order to verify the loan you want to consolidate.