How to Apply & Qualify for Student Loan Consolidation

How To Qualify for Student Loan Consolidation

Getting up the nerve to ask a lender to dance can intimidating and the risk of rejection could do more than break your heart…. It could cost you 10’s of thousands of dollars, ouch! While qualifiers differ from lender to lender during the consolidation review, there are some metrics that are fairly universal. By making sure you meet the requirements before applying will save you a lot of anxiety. It will also help you to know in advance if you need a cosigner, and if your cosigner will qualify. Let the adulting begin!!

Here are some standard requirements for student loan consolidation:

    • You must be 21 years of age for many lenders to refinance your student loans without a cosigner.
    • You must have a credit score of at least 600 FICO, while some lenders require a score as high as 680 to 700.
    • Proof of income, at least $24,000 to $60,000 per year depending on the lender. Paystubs should be sufficient.
    • Proof of graduation from a four-year degree program or graduate degree program
    • You must have attended a Title IV school, which means a school that qualifies for federal student aid. **Keep in mind – Some lenders have further requirements that the school cannot have been a for-profit university, which eliminates many online colleges.

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How to Apply for Private Student Loan Consolidation

There are many lenders available who are willing to speak with you about consolidating your student loan. But before applying for private student loan consolidation, you will need to know exactly who holds every one of your student loans and the balance of each loan. In addition, you’ll also need the total amount of your student loan debt. You may need to contact your lenders to learn more about what amounts to pay off.

Other information you will need:

    • Paystub, or proof of employment and salary amount
    • Your date of graduation and GPA,
    • Proof of citizenship, such as government issued ID.

Once you have all of these items, you are ready to apply. Most lenders have an online application and pre-approval process that takes only a few minutes to complete.

Go to the lender’s website and fill out the required information. Within a few minutes, you will have a decision as to whether or not you qualify for consolidation. If you do qualify, you will be notified of the next steps, which will likely involve sending proof of the information you provided to the lender.

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6 Tips for Completing the Application

    1. Make sure that all of the information you provide is true and factual, and that you have documentation to back up your claims.
    2. Check with your existing banks while shopping for the best consolidation lender. They will want to keep your business if they can, and since they already have a relationship with you, the process might save you some headache.
    3. Get at least 4 quotes – or more. You will only give yourself peace of mind that you indeed found the best consolidation lender with the best terms for your needs.
    4. Make notes and keep track of all important information such as what interest rate you were offered, what information you had to provide, and questions you had to answer and the answers you provided. If the lender requests an interview or further information you may need to refer to these notes.
    5. You may want to also consider refinancing your student loan rather than consolidating. Often times consolidating your student loan can leave you with a higher interest rate and a longer payout term, which means you could be left paying 10’s of thousands of more over the life of the loan. Check out our resources on the 6 benefits to refinancing your student loan.
    6. You can only consolidate ONCE, but you can refinance as many times as you need, so just because you consolidate your loan this year does NOT mean that you are stuck with that loan and those terms for the rest of your life – Thank the good Lord! See our top picks for Student Loan Refinancing Lenders of 2019

Preparing yourself and all of your needed documents ahead of time will save you a lot of time and anxiety during the consolidation process. Winging it will not do you any favors. Be honest, present your financial picture fully and with transparency. Make sure that you completely understand all of the terms and conditions before agreeing to a new loan. Check out refinancing to see if that might be the better fit for your situation

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Final Thoughts

While carrying student loans is an unwanted burden, there are tools at your disposal to help you pay down the loans with less frustration and in some cases saving you thousands of dollars.

Consolidation and refinancing are available to help you manage your day-to-day financial obligations and better help set you up for future success – it is worth your while to. Carefully evaluate all of your options and made an informed decision as you work to stabilize your financial health.

A final word of caution, before refinancing or consolidating make sure that you fully understand the benefits and loss of benefits you may be incurring. Remember federal loans will loose valuable protections like forbearance and deferment once they are in private hands. Read more about that here: 6 Tips for Consolidating Student Loans

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June 4, 2019

Mark Gibson

Mark Gibson is a personal finance consultant and wealth-investor.  Mark brings his top-notch financial analysis to his work at FiGuides as our lead consumer finance editor.

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