Chelsea, your motivation to get those loans paid off is great. Good for you! Consolidating both types of student loans with a reputable bank might offer some benefits such as simplified payments and potentially, a better interest rate. On the other hand, federal loans provide more protections for their borrowers, so, before you decide to consolidate, you’ll want to weigh whether those additional protections are worth the hassle of making separate payments.
If you want to go ahead, the first step is to find a reputable bank you’re comfortable working with and see what they can offer (ask friends and family for banks they do business with). Since you’re interested in paying them off faster, you’ll want to compare interest rates to see if you can lower yours. Extending the term, while it lowers your payments, will result in you paying more interest over time. And be sure to steer clear of companies charging high upfront fees to help you consolidate your student loans or claim to be “approved” or “exclusive” servicers to special programs.
If you have multiple federal loans, you might want to consider consolidating those with the Education Department as a first step. No matter how bureaucratic the process may feel, it can simplify your payments and make you eligible for more repayment programs. Information is available at https://studentaid.ed.gov. The technology has come a long way – you can create an account, electronically link your tax return to your account and the system will recommend the lowest cost plan you qualify for.
Good luck and keep us posted on how you’re doing?
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