In USA alone two out of every three students take a student loan with the average value of about $ 28.000. When students take these loans, they do not usually think about the payments. So, when they are graduated, they start to think how the debt consolidation would bring any help for the many payments.
The general rule is, that you cannot combine the private and the federal loans in the consolidation, because the federal loans have special tax payer benefits. You have to do the private student loan consolidation and the federal loan consolidation separately.
1. The Release Of The Co-Signers.
One nice benefit from the private student loan consolidation is, that if you have made the regular payments from 24 to 48 months, you have a chance to remove a co-signer from a potential liability. These people are usually relatives or parents.
2. The Important Details.
The lenders, who handle the private loan consolidation require usually a minimum balance of $ 5.000. It is useful to ask from the consolidating lender, whether there is an origination fee, what is the interest rate, is there any prepayment penalties and what will be the life of the new loan.
3. The Time The Process Will Need?
It depends on the lender, but usually the process will take not more than 45 days. Note, that if you are undergraduate or recent graduate, the co-signer will most probably needed. That is usually the job offered to the relative or parents.
4. Do I Have To Make Payments During The Consolidation Process?
Yes, you have to pay and actually it is also wise. If you think, the image, which the regular payments will give to the lender, they will greatly help the consolidation process. It also shows, that your credit remains in good standing.
5. The Austerity.
You cannot defer the private loan payments, if you want to go back to school. If you have tough time economically, you cannot avoid paying and you cannot get the tax benefits from the paid interests or to apply for forgiveness. If you die, the private loan payments go to your heirs.