Consolidating loans with bad credit
The consolidation loan pays off your existing loans and creates an entirely new single loan, so the goal is to receive more favorable terms when that happens.
That single consolidation payment may be lower than your previous payments combined if your repayment term is longer, and consolidation can also decrease your interest rate.
That result is not a given, but if your credit history has improved since you first borrowed, then you should try to leverage that improvement into a lower rate.
Every private lender has individual terms for its consolidation loans, but many give you a means of releasing your cosigner from the loan obligation after a period of successful payments.
One potential option to get organized and streamline your bills is debt consolidation.
I’ll also explain what debt consolidation is, different types of debt consolidation loans, where to get debt consolidation loans, alternatives to debt consolidation, and how to avoid scams.
Lending Club is the nation’s largest peer-to-peer lender.
In general, you can consolidate your federal loans separately from your private loans. Department of Education serves as the lender for the Direct Consolidation Loans, with which you can consolidate existing Direct Loans, Federal Family Education Loans (made under the old FFEL program), PLUS Loans, and sometimes Perkins Loans.
Which Federal Loans Are Eligible For Consolidation? Your loan status must be in one of the following four categories: What Are My Direct Consolidation Loan Repayment Options?
In 2012, the New York Federal Reserve estimated total student loan indebtedness at $867 billion, and most of that debt is federally guaranteed. That creates a built-in difficulty in repaying for some students.