Consolidate Private Student Loans - 4 Benefits You Can't Ignore

by: Thomas Erikson

Consolidate private student loans into one manageable loan. Instead of trying to juggle multiple private student loans, why not lump them together and make it easier to manage each month? When you consolidate your private student loans, you replace all of your outstanding private loans with one large private student loan. Sounds like a lot of work? Not really. In fact it's easy and here are the benefits that you'll enjoy.

The key benefit when you consolidate private student loans is lower monthly payments. Instead of making multiple monthly payments on different loans, you would have only one monthly payment. That one monthly payment will be less than the total amount of payments of all the other loans combined. Frankly, this is the time when you need your money the most - for rent, furniture, buying a house or car, getting married, starting a family...

By lumping your private student loans into one loan, you make repayment much more convenient. You get to deal with only one lender and that reduces the risk of forgetting about or missing payments. There's much less paperwork to worry about and you don't have to juggle a bunch of different due dates.

Consolidating your private student loans provides you the opportunity to get a lower interest rate and that saves you money. Lower interest charges help to offset the cost of lowering your monthly payment. So in the end, you can have lower monthly payments without extending your loan as far as you would have.

One of the added benefits of consolidating your private student loans is you can improve your credit score. When you receive a consolidation loan, the funds are used to pay off all of the loans being consolidated. So, in effect, you have just successfully paid off multiple loans - on time or early. And that goes a long way to improving your credit score.

So how exactly does that benefit you? Remember, the house or car you want to buy? That's going to take a mortgage or car loan. A better credit score means you pay less interest and that saves you money. In the case of a mortgage, it can mean thousands or even tens of thousands of dollars in savings.

If you want to lower your monthly payments, make them more convenient by dealing with only one loan and get a lower interest rate, you should consolidate private student loans. It not only helps keep your money at a time when you need it but it helps you improve your chances of saving more money on future loans.