Student Loan Advice | What kind of loan can I get to consolidate private student loans?

Question: I have over 100k in private student loans from several private lenders. The interest rate is out of this world due to my bad credit. Is there a way to get another loan to pay this off at a lower interest rate? What kind of student loan debt consolidation program should I be looking for? Most student loan companies only deal with Federal loans it seems. I keep seeing ads for mortgage loans with low monthly payments. Is there something like this for people like me with private student loans?

Answer:The type of cosolidated student loan that you’re elgible for will vary with several different factors. You’re credit score, cosigners, if any and many others.

As tuition rises and the student loan debt increases, companies have responded to the need for private loan consolidation. Sallie Mae has introduced a private loan consolidation product within the last several years. I would encourage you to read up on the various companies that offer private student loan consolidation and pick one that you’re comfortable working with long term.

Private consolidation loans are credit-based, meaning the interest rate charged will depend on your credit history, so anything you can do to raise your credit score before you try and consolidate might get you a lower interest rate on your loan.

You can look into a home equity loan to pay off these private student loans. Obviously this only works if you own a home and have equity built up! There is no limit to how much home equity loan interest you can deduct on your taxes, while there is a limit to how much student loan interest you can deduct. If you don’t own a home yet, you can keep this option in the back of your mind. You can always take out a home equity loan later after you buy a home on and use it to pay off whatever private consolidation loan you decide to obtain today.