Does consolidating student loans hurt credit shotgundating com
If those options don’t seem like a good fit, there are other debt consolidation options that also can affect your credit.Keep in mind it’s generally not a good idea to replace unsecured debt (like credit card debt) with secured debt (like a mortgage or car loan) because you could lose your home or vehicle if you can’t pay.Even when you are applying through the same lender, you are basically taking out a new loan each semester or year.
It’s important to remember that there are different types of loans — most significantly, there’s a big difference between federal loans (those issued by the U. government) and private loans (those issued by a bank, credit union, or other lending institution).
Hopefully, you tried to take advantage of financial aid in college — specifically, federal student loans — before turning to private loans, which often carry a higher interest rate and come with fewer borrower benefits.
If you did, you may want to learn how to specifically consolidate these federal loans.
To do this, many or all of the products featured here are from our partners. Two common debt consolidation approaches include getting a debt consolidation loan or a balance transfer card.
Both types require a hard inquiry on your credit, which can lower your credit score by a few points.
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The new loan typically has a longer repayment period, often as much as 15 years, but may have a lower interest rate.