Several participants in the SLA webinar today asked this specific question so I thought I would do a bit of research to answer it. With private loans, the benefits to consolidation come in seeking to get a lower interest rate on your loans (from a higher credit score perhaps) as well as combining several loans into one monthly payment. Some consolidation lenders also allow the borrower to extend the repayment period (e.g., from 15 to 25 years) thereby lowering the monthly payment while also increasing the total cost of the loan given the longer term.
Here are the two options that I came across in my midnight research (please share with me any options that you are aware of):
- Wells Fargo Private Consolidation Loan
- From $5,000 to $100,000
- Consolidate private loans from Wells Fargo or other lenders
- Starting interest rates vary from 5.75% to 12.75%
- Only lender partner listed on Simple Tuition site
- Here is some additional detail:
Wells Fargo Private ConsolidationSM Loan
The monthly payment amount examples are based on a $40,000 loan with a 25-year repayment term and the identified in-repayment APR. The Prime Rate (as published in the Wall Street Journal) may change monthly on the first day of each month, subject to a contractual minimum of 4.75% (the Variable Floor Rate). All payments are subject to a $50 monthly minimum.
Tier Index1 Plus APR Monthly Payment 1 1.00% 5.75% $251.64 2 2.75% 7.50% $295.60 3 3.75% 8.50% $322.09 4 5.75% 10.50% $377.67 5 7.75% 12.50% $436.14 6 9.50% 14.25% $489.1
- Chase Private Loan Consolidation
Here were some other sites that I investigated:
- Sallie Mae had this message on their website:
- Another site that I came across, Studentloanconsolidator.com, took my contact information and referred me to the social lending site, Lending Club.
- On NextStudent's Private Student Loan Consolidation webpage was this familiar message:
So, I guess the short answer is that among traditional lenders, Chase and Wells Fargo are the only lenders currently providing a consolidated private loan solution.