Loan Student Section

Private Students Loans: How to Consolidate Private Student Loans Into Federal Loans

ATTENTION!!! Subscribe to our FREE EVERYDAY JOB ALERTS and be the first to know about high paying job vacancies so you can apply IMMEDIATELY. Click here to JOIN OUR TELEGRAM CHANNEL.

If you’re struggling with private student loan debt, consider refinancing or consolidating your loans.

Doing so could lower your monthly payments and make it easier for you to manage your finances.

However, before you decide, it’s essential to thoroughly research the pros and cons of these moves.

Due to the partial government shutdown, student loan payments have been suspended until December 31, 2022.

In addition, the Department of Education has also stopped the collection of student loans that are in default.

The suspension of student loan payments was first implemented in March 2020 as part of the government’s pandemic response.

The article covers consolidating private student loans into federal loans and settling personal student loan debt.

SEE ALSO: Loan Portfolio Manager at Winock Limited

Settling Private Students Loans

Getting too much student loan debt could prevent you from saving for a home or retirement.

Fortunately, there are ways to reduce your monthly payments while keeping a budget.

The following are ways to settle them:

Consolidate Multiple Private Students Loans Into One Payment

This strategy can help reduce monthly payments and make debt repayment easier.

Another advantage of this strategy is that you can lower your payments by taking advantage of a more extended repayment period.

SEE ALSO: Loan Officer at Alan & Grant

Pay Down Extra Towards the Principal

The lowest monthly payment that you can make on student loans is due to how it doesn’t include late fees and penalties.

If you have a lot left over, an additional payment on top of the one you already have can help lower the principal amount.

How to Consolidate Private Student Loans into Federal Loans

Refinancing federal student loans can lead to them becoming private loans.

However, this doesn’t mean that private student loan borrowers can transfer their loans to the federal government.

It is impossible to transfer your private loans into federal loans. But you can combine both and refinance them under a new company.

Before consolidating your private and federal loans, ensure that you don’t have to take advantage of the programs associated with federal loans.

Also, ensure you don’t qualify for Public Service Loan Forgiveness. The following are easy steps to take to consolidate both;

  1. Know the exact amount you owe
  2. Check the rates and compare
  3. Enter your details to see how much you could save on a new refinance loan. You can use 5% if you can figure out what rate to expect.
    Federal loan benefits
    Although private loans may have lower interest rates, they do not have the same protections and repayment options as federal loans.
  4. Loan Forgiveness
    With student loan forgiveness, borrowers can get their debts discharged, canceled, or forgiven in certain circumstances under federal loans.
  5. Income-driven repayment
    Those who can’t afford to pay their loans can enroll in income-driven repayment plans. These plans allow them to make monthly payments at a percentage of their income.
  6. Postponement

If you are unemployed or have an economic hardship, you can temporarily stop paying your student loans to avoid financial hardship. These types of deferments can last for up to three years.

Although federal student loans can be transferred to the government, private loans can still be refinanced with a private lender that offers these features.

Can You Combine Federal and Private Student Loans?

Federal and private student loans can be combined, but this can be done only as a new private loan.

This process is carried out through student loan refinancing. The goal is to pay off your old loans and replace them with new ones with new terms.

Some private lenders refer to their products as consolidation loans. These aren’t part of the federal consolidation program, which allows you to consolidate multiple student loans into a single loan. You can’t include private loans in this process.

SEE ALSO: Microfinance Loan Officer at Cedar Microfinance Bank…

Conclusion

Now you know that transferring your private loans into federal loans is impossible, but you can combine both and refinance them under a new company.

It is paramount to state that you should ensure that you don’t have to take advantage of any programs associated with federal loans before consolidation.

Enter your email To get latest update on this job:

Delivered by FeedBurner