However, be certain both parties understand the potential consequences of having a cosigned loan.
Consolidating private student loans can be a difficult feat, but one possible solution is to have a cosigner help shoulder the burden of the new debt.
Although this is not a surefire way to get a consolidated loan application approved, it can be a beneficial tool.
In fact, sometimes it’s just downright disheartening.
Good news is that all those student loans can be consolidated into one monthly payment, lowering your interest rate and thus, your monthly payment. Yes, consolidating your student loans can be a great way to improve your credit and at the same time it allows you to enjoy lower payments each month.
Keep in mind that the Federal Government will not charge you any upfront fees in order to consolidate your student loans, so if you run across a company offering you their services to help you consolidate for a small fee, beware- it is a scam.
If your credit is poor, it may be more difficult for you to consolidate your private loans.While having a plethora of credit lines can be detrimental to your credit, having a handful of well-managed debts can boost your score over time.One thing to keep in mind, as your monthly payments go down, your ration of debt-to-income also goes down – this factor is particularly important as you go forward and try to open more lines of credit in the future (like mortgage loans, specifically).Here are some great tips when it comes to consolidating student loans: The interest rates on your federal and private student loans most likely vary, with the federal loans usually offering a lower interest rate.You want to avoid consolidating federal and private loans, as your chances of landing a low interest rate from a private loan consolidation is low, especially if you have a poor credit score now.In other words, while paying off a loan is inevitably a good thing for credit scores, holding an account open and responsibly managing the debt can actually be more beneficial to your credit score than paying it all off in one lump-sum.That being said, the positive impact of maintaining an open line of credit could be miniscule and not worth the additional interest accrued from keeping the line active.As financial expert Dave Ramsey once wrote, “You can only do it once.”Applying for any line of credit requires serious consideration and weighing of risks and rewards.When it comes to student loans, the stakes are even higher — without them, some students could never attend school.Your credit history is a snapshot of who you are financially.When it comes time to start repaying student loans, it can send many college grads into a tailspin, as the reality that they’ve spent years borrowing money and now have to pay it back hits them hard.