Important info

The pursuit for higher education can be an expensive endeavor both financially and emotionally. For such a noble quest, it is a shame that it must be pursued under the looming shadow of overwhelming loan payments. It is well worth your time to look into the options available for consolidating your student loans. Read on to learn how to consolidate your private student loans. It may keep you from what can amount to a life sentence enforced by your creditors.

1. 
   
   Step 1
   
   List all the outstanding private student loans that you owe, listing them in order from the highest balance to the lowest. For each one, list the interest rate, pay off amounts, loan period and payment address.
   
   
2. 
   
   Step 2
   
   Review the terms on each of your current loans. Terms such as pre-payment penalties may make it prohibitively expensive to refinance a particular loan by consolidating it with another.
   
   
3. 
   
   Step 3
   
   Clean up your credit report. When you apply for to consolidate your student loans, the interest rate will be based on your credit score. It is essential that your review your credit report and make sure there are no errors, which are common on most credit reports. If you have paid off a loan or closed a credit card and it is still listed on your credit report, it can significantly affect your credit score. Make sure that any errors are corrected.
   
   
4. 
   
   Step 4
   
   Determine your objectives for consolidating your student loans. The different student loans typically do not compete on interest rates, so they are pretty similar from one education lender to the other. However, here are some objectives that you can accomplish by consolidating your student loans:*You will have a single payment rather than two or more, making it easier to manage the loan.*If one or more of your private student loans has a variable interest rate, consolidating into a home equity loan will lock in your interest rate.*You can benefit from lower monthly payments because, by consolidating the loans, the terms are re-set, extending the amount of time you have to pay-off the loan. This does come at a price, though, because you will end up paying more in interest.*If your credit score has improved by 50 to 100 points since you applied for the loans, you can save significantly by consolidating because your interest rate will be much lower.
   
   
5. 
   
   Step 5
   
   Research the different terms that are offered by different education lenders. Pay particular attention to any pre-payment penalties. Verify whether the interest rates are fixed or variable. If you apply with a co-signer, find out when you can remove the co-signer from the loan. Find out the associated costs such as loan origination fees, and whether or not you can roll them into the loan if you choose to. Find out additional incentives offered by each lender such as interest rate reduction for setting up automatic payments from your bank account.
   
   
6. 
   
   Step 6
   
   Consider the pros and cons of consolidating with non-education lenders. Consider applying for a personal loan from your bank. Consider a home equity loan.
   
   
7. 
   
   Step 7
   
   Contact one of your current loan company. They may agree to consolidate all loans at a lower rather than lose you as a customer.
   
   
8. 
   
   Step 8
   
   Short-list the education lenders (and/or non-education lenders). Compare and make your selection. Apply to consolidate your loan.