Bank consolidating student loans

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When it comes to consolidation, the types of loans you have matters, but most federal loans, including Stafford, Perkins, Direct Plus and Supplemental loans, can be consolidated with other federal student loans.“The interest rate on (federal) consolidation loans is an average of the interest rates on the (federal) loans you’re consolidating,” says Ken O’Connor, director of student advocacy for Fynanz, a New York City firm providing technology for the private student loan market.Here’s what you need to know before deciding to consolidate student loans.Loan consolidation is when a borrower takes out a new loan to pay off several smaller student loans.

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Unlike federal loans, it can be trickier to get your private loans consolidated.It also means if you’re a new grad with little credit history, you might need a co-signer to be eligible.If a co-signer is necessary, O’Connor says borrowers should ask if there’s a co-signer release option after a certain period of time.Consolidating private loans works in a similar fashion, as far as paperwork goes.The difference is you’ll need to apply through a private lender.

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