Because they usually have shorter payback periods and higher interest rates and lack certain protections when compared with federal loans, you will probably want to consolidate your private student loans for the good overall effect doing so will have. This is especially true if your private loans exceed $5,000 or equal more than 8% of your income as you might be in danger of defaulting on those loans.

Reason To Consolidate
The interest rate on your consolidation loan will depend on your credit score, and if it improves significantly (50-100 points at least), you may find that you can obtain a lower interest rate by consulting a new lender or approaching your current lender (who may not want to lose your business) to consolidate. Also, under federal law, individuals can now receive an income tax deduction of up to $2,500 for the interest they pay on student loans.

A private education loan generally has a variable interest rate resembling that of a home-equity loan with a fixed rate, and if you are in that situation, you might be able to lock in the interest rate with a home-equity loan and benefit from the difference between the two types.

Finding The Best Way To Consolidate Private Student Loans
If you decide to work with an education lender to consolidate your student loans, they will determine the interest rate, rather than the federal government, and you may need to pay additional fees for creating your new loan. When you research your private consolidation loan, determine whether the interest rate is variable or fixed, and find out if there are any fees or prepayment penalties. All education loans allow for prepayment that is penalty free, and you will be able to make extra payments to reduce the principal, or pay the loan off entirely, without incurring an extra fee.

Before you go ‘private’, make sure that you get all of the government guaranteed loans you can. Stafford loans are spectacularly cheap, and going with a private loan before you go Stafford is a huge mistake. That said, sometimes a private loan is the only option, so here are some of the options you have.

Astrive Student Loans

Astrive student loans are private loans that are provided by the Union Federal Savings Bank. Like any other lending institution, they won’t provide funding to anyone. To be eligible for a loan through Astrive, you usually have to provide proof of enrollment, proof of income, citizenship status, credit history, and personal references.

Astrive doesn’t provide loans to individuals who live in Texas, Wisconsin, Washington, or Iowa. If you live in those states, you would need to probably find a cosigner who lived in another state.

The rate you will end up paying with an Astrive student loan will depend entirely on your credit history, the credit history of your cosigner, and the current rates as determined by the one month London Interbank Offered Rate.

Chase Education Finance

Chase Education Finance is a program created by JP Morgan Chase, and Co. With this program, you most definitely don’t have to worry about whether your loan was provided by a reputable bank.

Chase funded private student loans are available for both undergraduate and graduate students. The loans amounts are dependent upon what year the student is in school. For example, a first year undergraduate student can take out up to $5,500 per year, while a first year graduate student can take up to $20,500 per year.

The interest rate you would expect to pay with a Chase private loan is between 6% and 6.8%, depending on your credit history.

Chase will only loan to qualified borrowers and to find out whether you qualify, you will have to apply with Chase. They will obviously determine your eligibility based on credit history and employment status.