Since you cannot consolidate the private student loan with federal student loan, there is need to deal with private student loan consolidation as a lone entity. In this article, we are going to look at how this can be done and why it is highly beneficial to you as a student.
You can consolidate multiple private loans so that in essence you will have just one loan and then when it comes to the payment, you will pay it as just one loan instead of multiple. This has the benefit of offering you low monthly payment. This is the first of the 5 benefits of private student loan consolidation.
Of course the very act of being able to consolidate 2 or more private loans into one and make one single loan payment as mentioned above is an advantage by itself and comes second. Imagine if it were not possible to consolidate several private loans into one. You would have to make multiple payments on each of the loans separately. Since they will all have different rates of interest, you may end up paying heavily on the loans.
The interest rate factor
The third reason for private student loan consolidation has much to do with the interest rate. You will find that there are many lenders who are all competing to get as many students as possible to take the loans under them. The high competition is a boon to the students since the interest rate-whether fixed or variable- would go down in a bid to attract many students. You should therefore search far and wide to ensure that you secure the best interest rate on the student loan,
Cost of the loan
Is it possible to effectively reduce the cost of the student loan that you are currently servicing? It is possible and especially if you are dealing with a reputable banker or lender who offers interest rate discount. If you are coming across the term interest rate discount, this basically means that you will pay less on the interest on the monthly interest charges. This is the fourth reason why you should go for the private student loan consolidation. You might just be lucky to get huge interest rate discounts and end up paying far less than you had anticipated.
No fees on application
Perhaps the fifth but most poignant point here is that the whole process is pretty affordable to any student who wants a quick loan. Many students fail to secure this kind of loan not because they do not meet the requirements but because they are afraid that they might be charged. What you need to understand is that you will not be asked to make any early repayment fees. The origination fees are also exempted in the application. The overall effect is that you end up getting the loan at no cost on application. This is indeed good news that every student should take advantage of and benefit.