Eligibility Rules for Private Student Loan Debt Consolidation

If you have more than one private student loan, consolidating your loans may be a smart option. Student loan consolidation makes your life simpler by allowing you to make one student loan payment each month rather than several. Consolidation lenders, however, often have strict eligibility requirements.

Demonstrate a Good Payment History

Before a lender will agree to provide you with a consolidation loan, a loan officer will want to pull your credit report and evaluate your payment history on each of your loans. A good payment history suggests that you will continue to take your repayment obligation seriously in the future. An infrequent payment history full of late and missed payments suggests to the lender that you are a high risk and can result in your being turned down for the new loan.

Have a Significant Amount of Debt

If you have several student loans for small amounts, such as $1000 each, a consolidation lender is unlikely to offer you a consolidation loan. Small loans don’t provide lenders with the opportunity to make enough profit through the interest to make up for the effort expended in processing and servicing the loan. Ask your lender if it has a minimum consolidation amount.

Possess a Steady Income

Even if you made all of your previous student loan payments on time, have good credit and possess high-dollar loans, a consolidation lender won’t consolidate your loans unless you can prove that you have a steady income to repay the debt. Thus, your loan officer will want to see your most recent pay stubs or a letter from your employer stating your income.

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