Private or Federal Consolidation?

Our lenders offer both federal and private low interest debt consolidation for students. Learn which is right for you here.

Federal Low Interest Debt Consolidation for Students

Federal low interest debt consolidation for students is for those who have federal student loans. Federal consolidation is a free program sponsored by the federal government, though the actual loans are still issued by private lenders. With federal consolidation loans, there are no application fees or other charges, by law. The interest rates of your existing loans will be added together to yield a weighted average, which will then be rounded up to the nearest 1/8th of a percent. Your federal consolidation loan's interest rate cannot exceed 8.25% according to federal law. You will retain all federal borrower benefits, and most lenders do not charge prepayment penalties. Here are some of the loans that qualify for federal low interest debt consolidation for students:

• Supplemental Loans for Students
• Perkins Loans
• Stafford Loans
• PLUS Loans & Grad PLUS Loans
• Health Education Assistance Loans
• Federal Direct Loans

Private Low Interest Debt Consolidation for Students

If you have private student loans, they will not qualify for federal student loan consolidation. However, our lenders also offer private low interest debt consolidation for students with private student loans. Private loan consolidation is not sponsored by the government, so private consolidation loans more closely resemble any other type of private loan for which you would apply. Private low interest debt consolidation for students usually requires that you pass a credit check or recruit a co-signer, and interest rates tend to be higher than with federal consolidation loans. Here are some of the benefits of private low interest debt consolidation for students (will vary by lender):

• Reduce monthly payments by as much as half during the first year
• Option to release co-signer after making so many on-time payments w/ some lenders
• No prepayment penalties with most lenders
• Extend your loan's term to up to 30 years depending on the amount of debt you have
• Get rate reductions for things like automatic withdrawal
• Shorten your loan's term to save on interest expense over time

Please check out our Frequently Asked Questions page if you have any questions.