Consolidating public and private loans

Private lenders also usually require that borrowers have a certain minimum amount of student loan debt (say, ,000) in order to refinance.

A private lender will determine the interest rate primarily by looking at your credit score.

Private student loan consolidation or “refinancing” involves repaying older student loans by taking out a new loan from a private lender to replace them.

Most lenders require the borrower to be a citizen of the United States (or a legal resident), and to meet certain credit, employment, education, and income requirements.The application to refinance is similar to an application for a new loan and market rates and your financial profile determine the new loan's interest rate.Both consolidating and refinancing can take away the headache of managing multiple student loans, but there are pros and cons to consider before you apply.(“Federal” student loans are loans that are made or guaranteed by the U. Department of Education.)There are several reasons to keep federal and private student loans separate.By refinancing federal student loans into a private loan, this can cause the loss of eligibility for deferment, forbearance, forgiveness, and cancellation options, as well as eligibility for affordable repayment plans based on income, which may be available under the federal loans.In most cases your old loans were probably held by other banks - not the one you're already with.

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