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Go to StudentLoans.gov to start the consolidation process. Fill in your personal information. Pick the loans you want to consolidate. Choose your student loan service. Choose your repayment plan.
Remember that a debt consolidation loan won't solve all your debt problems. It'll only make it easier for you to pay it back. You still owe the same amount of money if not more because of the fees you have to pay for the loan approval. If you have all three of these, then a debt consolidation loan is a good idea.
Debt consolidation may hurt your credit score if you: Continue to make charges on your credit cards after you pay off your balances. (Any gain from reducing your credit utilization will go away quickly when your balances go up again) You're 30 days (or more) late on making your payments on the debt consolidation loan.
Trying to consolidate debt with bad credit is not a great idea. If your credit rating is low, it's hard to get a low-interest loan to consolidate debts, and while it might feel nice to have only one loan payment, debt consolidation with a high-interest loan can make your financial situation worse instead of better.
The pros for debt consolidation are obvious: You are simplifying the process of paying your bills. The one new loan should have a lower interest rate and monthly payment than the combined cost of the bills you consolidated. The cons to debt consolidation are just as obvious: The debt is not forgiven or even reduced.
Personal loans can be used as debt consolidation loans if you can borrow a loan large enough to cover all your balances. A personal loan is an unsecured loan that has fixed payments over a fixed period of time. Once you're approved for a personal loan, you can use it to consolidate your debts.
You can consolidate all, just some, or even just one of your student loans. Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea. Consolidation loan borrowers should not be charged origination fees.
It can be overwhelming and confusing to have many payments to a bunch of loan providers, so it can simplify things to concentrate on a single loan payment. Consolidating your student loans also won't affect your credit score much. Federal consolidation doesn't incur a credit check, so it won't hurt your credit score.
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