As students take on financial aid in the form of student loans, it's not uncommon for a single student to have multiple loans as they move closer to graduation. Private school loan consolidation is the process of combining multiple private student loans (as opposed to federal) into a single consolidated loan.
The main purpose of obtaining a private school loan consolidation is to lower monthly payments, reduce the interest rate and extend the terms of re-payment. If a student has borrowed more than $5000 in private loans or if the existing student loan debt exceeds 8% of the student's income, they should consider consolidation.
- Lenders
- Interest rates
- Total loan payments
- Payments remaining on original loans
For some students, the ease of managing a single payment is the most significant benefit of private school loan consolidation. What Is Student Loan Consolidation? What If I am Default on My Student Loan Payments? How Can I Obtain More Information Regarding School Loan Consolidation?
· by requesting it from the holder of your original student loan
Consolidating a federal loan is taking all of the student loan payments you owe and combining them into one lump sum. What is also beneficial about a school loan consolidation plan is that a student can usually get a little lower interest rate by choosing to combine all their loans together. Federal loans, even consolidated loans, allow a grace period of several months after graduation before a student must start making payments.
You will also lose the opportunity to consolidate your loan, since only federal loans are consolidated. If you go the federal loan route, then you can look into Stafford loans, Perkins loans, or other federal consolidation programs offered by some of the larger national lenders.
If you choose the federal loan route, then you will be able to consolidate as much as you need because there is no set limit on loan consolidation for student loan payments. Eventually, you might find you want a school loan consolidation.

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