Consolidating is not just for federal loans

If you're a recent college graduate then you've no doubt been bombarded with one solicitation after the next to consolidate your federal student loans. But what about your private loans? It's becoming more common for college graduates to have a combination of both federal and private loans for school; however, most of what you hear about when it comes to student loan consolidation pertains to federal student loans. But if you needed to take out multiple private loans to get you through school, you can consolidate your private student loans to save yourself some money each month.

Repayment terms of consolidating private student loans

In order to consolidate private student loans the amount you owe must be greater than $10,000 and not exceed more than $250,000. Most federal consolidation loans are set up so that you pay back what you owe within 10 years, but consolidated private student loans generally work in two different ways when it comes to the length of time in which you have to repay the loan. If you owe more than $40,000 then you have around 25 years to finish repaying the loan, and if you owe less than $40,000 you have around 20 years. This will of course depend on the financial institution you get the consolidating loan through.

Interest rate of consolidated private student loans

As far as the interest rate is concerned when you consolidate private student loans, it is based on whatever the prime rate is, which is adjusted monthly. It will also depend on your credit score. You can expect to pay an interest rate between 0% and 9.90% when you're paying back the loan. It can get high, but having a long length of time in which to pay back the loan helps to offset the interest rate.

Consolidate loans and transition into the workplace

College graduates enter the workforce finding that it's not easy finding the right career path and excelling on it. Since this will be one of their primary concerns, and because it is an important one, consolidating their private student loans can be a huge help by providing them peace of mind when it comes to paying their bill every month.