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Private Student Loan Consolidation

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Private student loans cannot, in general, be consolidated with federal student loans. The low interest rates on federal consolidation loans are not available to private education loans. Nevertheless, there are several options for refinancing private education loans.

Since most private education loans do not compete on price, a private consolidation loan is merely replacing one or more private education loans with another. So the main benefit of such a consolidation is obtaining a single monthly payment. Also, since the consolidation resets the term of the loan, this may reduce the monthly payment (at a cost, of course, of increasing the total interest paid over the lifetime of the loan).

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However, since the interest rates on private student loans are based on your credit score, you may be able to get a lower interest rate through a private consolidation loan if your credit score has improved significantly since you first obtained the loan. For example, if you've graduated and now have a good job and have been building a good credit history, your credit score may have improved. If your credit score has increased by 50-100 points or more, you may be able to get a lower interest rate by consolidating your debt with another lender. You can also try talking to the current holder of your loans, to see if they'll reduce the interest rate on your loans rather than lose your loans to another lender.

Home Equity Loans

Private education loans tend to have interest rates that are in the same ballpark as home equity loans. If your private education loan has a variable interest rate, you might consider using a fixed rate home equity loan to pay off the private education loan, effectively locking in the interest rate.

Education Lenders

The following education lenders will consolidate private education loans. These are private consolidation programs, so the interest rates are dictated by the lender, not the government. There may be additional fees charged for originating these loans.

You should not consolidate your federal student loans together with your private education loans. They should be consolidated separately, as the federal consolidation loans offer superior benefits and lower interest rates for consolidating federal student loans.

When evaluating a private consolidation loan, ask whether the interest rate is fixed or variable, whether there are any fees, and whether there are prepayment penalties.

For the most updated information, it’s best to check the individual lender websites.

Lender Description
Cedar Education Lending Private Student Loan Consolidation $7,500 minimum. Maximum of $125,000 in undergraduate private student loan debt and $175,000 in graduate school debt. Up to 15-year repayment term with no pre-payment penalties. Interest ranges from 3M Prime + 1.50% to 3M Prime + 4.00%. Origination fee is 1.00%. Interest-Only Repayment Option for up to 4 years for eligible borrowers. Cosigner release option after 12 months of on-time principal and interest payments. Loans originated by cuStudentLoans.org.
cuStudentLoans.org cuGrad Private Student Loan Consolidation $7,500 minimum. $125,000 maximum for undergraduate degree recipients, $175,000 for graduate degree recipients. Up to 15-year term. Variable rate loan. Interest ranges from 3M LIBOR + 4.40% to 3M LIBOR + 6.90%. There is no origination fee. Cosigner release option after 12 months of on-time principal and interest payments, provided that credit criteria are satisfied. Graduated, interest-only (up to 4 years) and level repayment options available.
DEAL Consolidation Loan Only borrowers with at least one DEAL private student loan from the Bank of North Dakota (BND) are eligible. There are both fixed interest and variable interest rate options. The variable interest rates are based on the current variable rate for the DEAL loan program, the 3-month LIBOR index plus either 1.5% or 2.5%, with the lower rate reserved for borrowers who are from North Dakota or who enrolled at a North Dakota college. The fixed rate is calculated by replacing the interest rate on any variable-rate loans with the current fixed rate for new DEAL loans, FHLB 10-Year Advanced Rate plus either 2% or 3% (with the lower rate reserved for borrowers who are from North Dakota or who enrolled at a North Dakota college) and then calculating the weighted average of the interest rates on the loans, rounded up to the nearest 1/8th of a point. A 2% fee is charged on any non-DEAL private student loans included in the DEAL consolidation loan. The repayment term may be up to 25 years depending on the loan balance. Cosigner release option after 24 months of on-time payments, provided that credit criteria are satisfied.
Independent Community Bankers of America (ICBA) $25,000 minimum. $150,000 maximum. 20-year term for loans on variable interest rate and 15 year maximum on fixed interest rate.. Interest rates of 3-month LIBOR + 6.80% to 3-month LIBOR + 7.3% on Variable rates. Fixed rates of 6.0% to 8.85%. No prepayment penalties. Cosigner release after 24 on-time payments, contingent upon primary borrower credit.
NextStudent Private Consolidation Loan NextStudent has temporarily suspended this private consolidation loan program. $7,500 minimum. $300,000 maximum. Up to 30-year term. No prepayment penalties. Variable rate loan. Interest rates of 3-month LIBOR + 1.00% to 3-month LIBOR + 1.75% during the first year and 3-month LIBOR + 5.00% to 3-month LIBOR + 5.75% after the first year. Interest rates vary quarterly. Origination fees of 0% to 5%. No prepayment penalties.
SoFi Student Loan Refinancing $10,000 minimum, No maximum. SoFi offers consolidation of federal and private student loans with variable rate and fixed rate options. The variable interest rates range from 1-month LIBOR + 3.00% to 1-month LIBOR + 5.00% and are capped at 8.95%. The fixed rates range from 5.24% to 6.99% with repayment terms of 5, 10 or 15 years. All loans are eligible for 0.25% interest rate reduction with auto-debit. No origination fees or prepayment penalties. US citizenship or permanent residence is required.
Student Loan Network Private Loan Consolidation $10,000 minimum. $300,000 maximum. 20-year term for loans less than $40,000. Up to 30-year loan term for higher amounts. Variable rate loan. Interest rates of 3-month LIBOR + 5.00% to 3-month LIBOR + 8.5%. Origination fees of 1% to 5%. No prepayment penalties. Cosigner release after 48 on-time payments, contingent upon primary borrower credit.
SunTrust Private Loan Consolidation $75,000 maximum for students who have a Bachelor's degree and $150,000 maximum for students who have a graduate degree. (There is also an aggregate education debt maximum of $150,000 with a Bachelor's degree and $250,000 with a graduate degree. The aggregate education debt limit includes both federal and private student loans.) $7,500 minimum. ($15,001 minimum for borrowers or cosigners residing in Kentucky.) Choice of a fixed or variable interest rate. The fixed rate ranges from 5.85% to 10.35%. The variable rate ranges from 1-month LIBOR + 3.85% to 1-month LIBOR + 8.10%. There are no origination fees. Rates effective 1/1/2013. 0.25% interest rate reduction for auto-debit. SunTrust Bank customers receive an additional 0.25% interest rate reduction for making the auto-debit payments from a SunTrust account. Repayment terms of 15, 20 or 25 years. No prepayment penalties. US citizenship or permanent residence is required. Borrowers must have reached the age of majority for their state and may not reside in Illinois, Iowa or Wisconsin. Cosigners may not reside in Illinois. Borrowers must satisfy debt to income ratios and other credit criteria. Cosigner release after the first 48 consecutive full principal and interest payments are received on time (no later than ten days after the due date), contingent upon the primary borrower satisfying credit criteria on their own. The primary borrower must also be enrolled in auto-debit.
Wells Fargo Private Consolidation Loan $5,000 minimum. $40,000 to $100,000 maximum, depending on credit. Aggregate loan limit of $100,000 (including other education debt). Up to 15-year term. Variable rate or fixed rate loan. Interest rates range from Prime + 1.0% to Prime + 5.75% for variable rate loans and from 8.5% to 13.3% for fixed rate loans. Variable rate has a floor rate of 3.25%. No origination fees. Up to 0.25% interest rate reduction for auto-debit. Up to 0.5% interest rate reduction with existing qualifying Wells Fargo account.

 

 
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