Consolidating defaulted private loan

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And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Our partners cannot pay us to guarantee favorable reviews of their products or services. " At Nerd Wallet, we strive to help you make financial decisions with confidence. Debt consolidation is a strategy to roll multiple old debts into a single new one.

We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research.

» MORE: Nerd Wallet’s best balance transfer credit cards Pros: Back to top You can use an unsecured personal loan from your local bank or credit union or an online lender to consolidate credit card or other types of debt.

The loan should give you a lower interest rate on your debt or help you pay it off faster.

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Unless the loans you want to consolidate are in a deferment, forbearance, or grace period, it’s important for you to continue making payments on those loans until your consolidation servicer tells you that they have been paid off by your new Direct Consolidation Loan.

To do this, many or all of the products featured here are from our partners. Ideally, that new debt has a lower interest rate than your existing debt, making payments more manageable or the payoff period shorter.

The option that best suits you depends on your overall debt load, credit score and history, available cash and other aspects of your financial situation, as well as your self-discipline.

Borrowers have different needs, so there are several repayment plans—including income-driven repayment plans, which base your monthly payment amount on your income and family size.

You’ll select a repayment plan when you apply for a Direct Consolidation Loan. You apply for a Direct Consolidation Loan through Student After you submit your application electronically at Student or by mailing a paper application, the consolidation servicer you selected will complete the actions required to consolidate your eligible loans.

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