Private Student Loan Consolidation

Sunshine_IHB

Sunshine_IHB

New member
Hello,



I'm looking for IHBers who: (1) have recently consolidated private student loan debt, or (2) have knowledge about private student loan consolidation. With a low Prime Rate and LIBOR, my variable rate private student loans are less than 5%. However, I fear that rates will start to go up and eventually sky rocket and I'd like to explore consolidation options. In 2006, when the prime rate was 8%, I shopped around and the best I could get was about 11% fixed with very good credit and so I decided not to consolidate. I spoke with a few people in the industry at that time and I was told that there was no incentive for the banks to be competitive, especially since the banks cannot repossess my education if I default on my payments (even though student loan debt cannot be wiped out in bankruptcy). I have very good credit and I've never defaulted or made a late payment on my loans.



Questions:

1. What are the best fixed rates currently offered, and by which entities?

2. I've heard that rates based on the LIBOR are better. What are your thoughts?

3. Has anybody had success with renegotiating into a fixed rate consolidation loan with their current lienholder?



Thanks for your time!
 
[quote author="Sunshine" date=1243510224]Hello,



I'm looking for IHBers who: (1) have recently consolidated private student loan debt, or (2) have knowledge about private student loan consolidation. With a low Prime Rate and LIBOR, my variable rate private student loans are less than 5%. However, I fear that rates will start to go up and eventually sky rocket and I'd like to explore consolidation options. In 2006, when the prime rate was 8%, I shopped around and the best I could get was about 11% fixed with very good credit and so I decided not to consolidate. I spoke with a few people in the industry at that time and I was told that there was no incentive for the banks to be competitive, especially since the banks cannot repossess my education if I default on my payments (even though student loan debt cannot be wiped out in bankruptcy). I have very good credit and I've never defaulted or made a late payment on my loans.



Questions:

1. What are the best fixed rates currently offered, and by which entities?

2. I've heard that rates based on the LIBOR are better. What are your thoughts?

3. Has anybody had success with renegotiating into a fixed rate consolidation loan with their current lienholder?



Thanks for your time!</blockquote>
The problem with private loan consolidation is that it is tough to find nowadays since the credit markets have dried up. The lowest rates that I saw recently was Prime +.50% with a floor rate of 5% of 6% with some kind of origination fee with an adjustable rate. I did see a lender that offered a LIBOR based rate at LIBOR + 5% to 6% with an origination fee (also an adjustable rate). Forget that, I have my private MBA loans through Sallie Mae at Prime - 0.50% with no floor (I'm enjoying my 2.75% interest rate for now). You will not find a fixed rate loan program unless you are willing to pay a 10%+ rate.
 
[quote author="usctrojanman29" date=1243514286][quote author="Sunshine" date=1243510224]Hello,



I'm looking for IHBers who: (1) have recently consolidated private student loan debt, or (2) have knowledge about private student loan consolidation. With a low Prime Rate and LIBOR, my variable rate private student loans are less than 5%. However, I fear that rates will start to go up and eventually sky rocket and I'd like to explore consolidation options. In 2006, when the prime rate was 8%, I shopped around and the best I could get was about 11% fixed with very good credit and so I decided not to consolidate. I spoke with a few people in the industry at that time and I was told that there was no incentive for the banks to be competitive, especially since the banks cannot repossess my education if I default on my payments (even though student loan debt cannot be wiped out in bankruptcy). I have very good credit and I've never defaulted or made a late payment on my loans.



Questions:

1. What are the best fixed rates currently offered, and by which entities?

2. I've heard that rates based on the LIBOR are better. What are your thoughts?

3. Has anybody had success with renegotiating into a fixed rate consolidation loan with their current lienholder?



Thanks for your time!</blockquote>
The problem with private loan consolidation is that it is tough to find nowadays since the credit markets have dried up. The lowest rates that I saw recently was Prime +.50% with a floor rate of 5% of 6% with some kind of origination fee with an adjustable rate. I did see a lender that offered a LIBOR based rate at LIBOR + 5% to 6% with an origination fee (also an adjustable rate). Forget that, I have my private MBA loans through Sallie Mae at Prime - 0.50% with no floor (I'm enjoying my 2.75% interest rate for now). You will not find a fixed rate loan program unless you are willing to pay a 10%+ rate.</blockquote>


What you described above is what I feared-- credit markets drying up and an unacceptable fixed rate. My federal loans are nicely consolidated at less than 2%, but the adjustable rate private loans freak me out, even at about 4% right now.
 
[quote author="Sunshine" date=1243516404][quote author="usctrojanman29" date=1243514286][quote author="Sunshine" date=1243510224]Hello,



I'm looking for IHBers who: (1) have recently consolidated private student loan debt, or (2) have knowledge about private student loan consolidation. With a low Prime Rate and LIBOR, my variable rate private student loans are less than 5%. However, I fear that rates will start to go up and eventually sky rocket and I'd like to explore consolidation options. In 2006, when the prime rate was 8%, I shopped around and the best I could get was about 11% fixed with very good credit and so I decided not to consolidate. I spoke with a few people in the industry at that time and I was told that there was no incentive for the banks to be competitive, especially since the banks cannot repossess my education if I default on my payments (even though student loan debt cannot be wiped out in bankruptcy). I have very good credit and I've never defaulted or made a late payment on my loans.



Questions:

1. What are the best fixed rates currently offered, and by which entities?

2. I've heard that rates based on the LIBOR are better. What are your thoughts?

3. Has anybody had success with renegotiating into a fixed rate consolidation loan with their current lienholder?



Thanks for your time!</blockquote>
The problem with private loan consolidation is that it is tough to find nowadays since the credit markets have dried up. The lowest rates that I saw recently was Prime +.50% with a floor rate of 5% of 6% with some kind of origination fee with an adjustable rate. I did see a lender that offered a LIBOR based rate at LIBOR + 5% to 6% with an origination fee (also an adjustable rate). Forget that, I have my private MBA loans through Sallie Mae at Prime - 0.50% with no floor (I'm enjoying my 2.75% interest rate for now). You will not find a fixed rate loan program unless you are willing to pay a 10%+ rate.</blockquote>


What you described above is what I feared-- credit markets drying up and an unacceptable fixed rate. My federal loans are nicely consolidated at less than 2%, but the adjustable rate private loans freak me out, even at about 4% right now.</blockquote>
I hear ya, I'm paying a fixed rate of 1.75% on my stafford loans (about $40k) and I too am worried about my private loan rates skyrocketing to double digits in the next 5+ years (about $50k).
 
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