How to Consolidate Your Private Student Loans

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Private student loan consolidations accomplish the same objectives as consolidating federal loans. However it can be more difficult to consolidate private student loans. Timing, your credit history, the lender and loan option you choose all play a role in making decisions about how and when to consolidate private student loans.

Assess Your Credit Profile

Interest rates on a private student loan consolidation -- and in some cases, whether consolidation is even possible -- depend heavily on your credit score. Get a free copy of your credit report from each of the three major credit bureaus at and review each one to make sure the information is accurate. According to Student Loan Hero, most private lenders require a minimum credit score of about 640. If yours is below this, wait to consolidate until your score improves or find someone to co-sign the loan.

Find and Compare Lenders

A private education lender is a common choice for many borrowers, but it's not your only option. Check with banks and credit unions, as they often offer consolidation loans. A home equity loan is another possible solution. Compare potential lenders carefully, as there may be significant differences in the loan term and minimum and maximum amounts. For example, one lender may limit the loan term to 15 years while another may allow loans to extend for up to 30 years.

Evaluate Terms and Conditions

Ask questions about interest rates, fees, penalties and payment options as you evaluate each potential lender. These include:

  • What is the interest rate, is it fixed or variable and do you have a choice?
  • Does the loan involves additional fees, such as a loan origination fee?
  • Is there a prepayment penalty?
  • Is there an interest rate reduction for setting up automatic payments?
  • Are there hardship payment protections?

What to Avoid

In a Bankrate article, student debt expert Betsy Mayotte recommended that borrowers avoid consolidating federal and private loans into a single loan. By doing so you’ll lose all the federal repayment protections, and essentially turn a federal student loan into a private loan.