Consolidating Student Loans
Find out whether you should consolidate student loan debt
As a general rule, consolidating outstanding debt is a good idea for most consumers. Whether it involves credit card debt, student loan debt or some other form of outstanding financial liability, loan consolidation helps a borrower stay on top of his obligations by converting multiple monthly bills into a single, streamlined payment. Consolidating debt can also provide the borrower an opportunity to change the loan structure, lower the interest rate or otherwise reduce the size of the payments.
That's still the case when it comes to your student loans. If you want to consolidate student loans, pay attention to the important differences between federal student loans and private loans secured from banks and other financial institutions.
Federal and private student loans can be consolidated into one loan
The Education Refinance Loan from Citizens Bank allows students to combine federal and private student loans into one new loan. And since monthly payments are also combined, consolidation can make loan repayment easier to manage. Before you decide to consolidate federal and private student loans, speak to one of our Education Finance Specialists. Since some federal loans come with unique benefits that are not available after consolidation, our Specialists can help you decide whether consolidation is right for you.
Why you should consider consolidating student loans
In addition to the attractiveness of making a single monthly student loan payment, there's another important reason why borrowers might find consolidating student loans worthwhile, when available. Because these loans were approved based on the creditworthiness of the borrower, you may qualify for lower interest rates on a loan consolidation if you've built a good credit record since taking out the initial loans. That way, through the refinance, you may be able to reduce your monthly payment or interest rate, or possibly both.
What to look for when you consolidate student loan debt
There are many factors to consider when consolidating student loans, but it's important to be on the lookout for a few key variables:
- Is the interest rate fixed or variable? Are there prepayment penalties? If so, how much are they? Our Education Refinance Loan, does not charge pre-payment penalties. Should you be in a position to pay more toward the principal of the loan, you can without concern.
- What other types of fees will apply? Citizens Bank does not charge application, origination or disbursement fees to refinance or consolidate student loans.
Because there are different loan terms available in the market, refinancing or consolidating may or may not deliver the results you expect. However, you can use our loan estimator tool to find out what your new terms and monthly payment would be and use this information when considering your existing loans and other needs. Be aware that refinancing and consolidation could increase interest costs over the total life of the loan if you choose an extended term because it spreads the payments out over a longer period of time. If you have questions about your particular situation, our Education Finance Specialists can help.
Work with Citizens Bank to understand your student loan consolidation options
With the Education Refinance Loan from Citizens Bank you can refinance a single private student loan or consolidate multiple private and federal student loans from any lender – not just Citizens Bank. To learn more, speak to one of our Education Finance Specialists. They can help you weigh your options and make the right decision for your financial situation.