How to Consolidate Your Private Student Loans & Actually Get Out of Debt

In 2019, there are literally hundreds of companies offering to consolidate private student loans, but before you choose to consolidate your private student loan debt, make sure to take this important fact into account: many of those companies offering to help you with this process are a total scam!

This is especially true of many of the smaller, mom and pop type companies you’ve never heard of, who buy your contact information from debt collectors, then send you letters or emails promising to refinance and consolidate your loans at a low interest rate, no matter how poor your credit score might be.

What you need to realize is that if the offer sounds too good to be true, then it probably is! BE CAREFUL!

Don’t Get Scammed!

I’ve been helping people with private student debt for ten years now, and in all that time, I’ve only found a SINGLE company who actually helps the majority of people who go to them for assistance.

Whatever you do, DO NOT RESPOND to the unsolicited emails and letters that you receive from random mom and pop consolidation companies!

Instead, what you should do is call my partners at McCarthy Law PLC; a group of attorneys who specialize in dealing with PRIVATE Student Loans. They're the only company who can significantly reduce your private debt and lower your monthly payments, no matter how much you may owe or how long you've been in default.

How do they do it? First, they negotiate with your lender to settle your private debt for around 40% of whatever you currently owe by promising that you'll pay off the entire settled amount in a single, lump-sum payment.

Don't have 40% sitting around in cash? Don't worry! They'll get you a new loan for the amount your lender settles on, allowing you to pay off the settled loan in its entirety, restoring your credit, and reducing your monthly payments.

McCarthy Law is the only company I trust to help my readers with Private Student Loans, but please DO NOT CALL them if you only have Federal loans, because they won't be able to help.

To get McCarthy's help with your Private Student Loans, call them at 1-877-317-0455.

What Is Student Loan Consolidation?

Consolidation is the process that allows you to combine multiple student loans into a brand new loan, with a new interest rate, new repayment schedule and new monthly payment.

The way it works is that the company who consolidates your loan pays off your old loans, then issues you a new one with entirely different terms.

Consolidation programs are extremely popular because they are typically available without up-front costs, and oftentimes offer significantly smaller monthly payments than existing loans.

Keep in mind though that some consolidation programs are better than others, and while some will save you some serious coin, others could end up costing you in the long run.

Why Should You Consolidate Your Student Loan Debt?

There are four important reasons to consider consolidating your student loans, including:

  1. Consolidation Reduces Complexity – Combining all your loans makes managing them much easier. Instead of sending multiple monthly payments to a variety of different lenders, you’ll only need to make one payment to one lender.
  2. Consolidation Reduces Monthly Payments – Consolidating your loans almost always reduces your monthly payments. Would you like a couple hundred extra dollars a month to spend on things other than student loans? I know I would!
  3. Consolidation Reduces Interest Rates – Consolidated loans almost always come with lower interest rates. If you’ve got a better credit score or higher income than when you first borrowed, this is especially true.
  4. Consolidation Saves You Money – Consolidation can literally save you tens of thousands of dollars over the course of your loan. For many borrowers, it’s the best, fastest and easiest way to pay off student loan debt.

Now that you know why consolidation is a good idea, let’s get into details about how to pick the right lender.

How To Pick the Right Consolidation Company

The single most important part of the private student loan consolidation process is to make sure that you choose the right company for assistance!

This decision could make the difference between paying hundreds or even thousands of dollars for a “service” that doesn’t provide any actual financial value, and finding one that literally solves all of your financial problems.

Remember, this industry is chock-full of con artists and scammers, and you need to make sure that you’re working with a reputable company before you even begin to consider signing any paperwork!

As I already mentioned above, I’ve been interviewing private debt consolidators for TEN YEARS and I’ve finally found one who I completely trust, and refer all of my readers to – McCarthy Law PLC.

Why do I like McCarthy? Because they run a nationwide network of attorneys who are backed by a huge organization with the power to renegotiate debt with the private student loan collection agencies and servicing companies that usually don’t give in and offer discounts no matter how badly underwater their borrowers may be.

McCarthy can basically take over all the negotiations on your behalf, battle with the lender to get you a debt settlement for pennies on the dollar – usually about 40% of your total debt – and secure a new loan for you that allows you to pay off the old loan instantly, repairing the ding on your credit report, and significantly reducing your monthly loan payments in the process!

I don’t send my readers to anyone other than McCarthy Law, and you can get a free consultation with them right now, so give them a call at 1-877-317-0455 to see if they can help you!

Should You Consolidate?

To be honest, that depends. Not everyone will save money by consolidating their loans.

However, if you meet any of the following eligibility criteria, then it’s probably worth consolidating your student debt:

  • You’ve got multiple private student loans from the same lender, or different lenders
  • You’re having trouble making monthly payments because they’re simply too high
  • Your student loans were issued at a time when interest rates were higher than they are now (basically any time in history)
  • Your loans came with a variable interest rate which is about to increase, or which already has increased
  • Your credit score has improved since the time you originally borrowed the money
  • You have a higher income than you did when you originally borrowed the money
  • You weren’t able to get a cosigner for your original loans, but you can get one now

If any of the conditions above apply to your situation, then you could end up saving significant money by consolidation your debt.

Who Offers the Best Consolidation Rates?

That’s an easy one, and like I mentioned toward the beginning of this post, the biggest lenders typically offer the best rates, because they’re able to aggregate so much capital together that they reduce their risk of borrowing to any individual.

One way to figure out which lender will give you the best deal is to talk to all the lenders individually and compare their offers, then go with the one that will save you the most money.

However, as I keep mentioning, you have to be so careful to make sure that you’re not getting scammed by a shady consolidator that my suggestion for most people is to simply forget about getting a perfect rate – especially if you have terrible credit – and simply contacting my partners at McCarthy Law PLC.

These guys know exactly what they’re doing, they can help almost anyone, no matter how much you owe or how badly your credit has been destroyed, and I trust them completely to take good care of my readers.

Don’t risk getting scammed! If you’re going to consolidate your loans, call McCarthy Law today at 1-877-317-0455.

Are There Disadvantages to Consolidation?

Yes, in certain circumstances there are definitely reasons not to consolidate.

Here are a couple of the drawbacks that will want to consider before deciding to consolidate:

  •  Consolidation Could Cost More – This really depends on your situation, but even though consolidating your debt decreases your monthly payments, you might end up owing more over the lifetime of the loan by extending the loans term (thus giving more time for interest to accumulate additional costs)
  • Variable Interest Rates Could Backfire – Right now interest rates are near historic lows, making this one of the best times in history to consolidate debt, but if you consolidate with a variable interest rate, then you could end up paying more down the line when the interest rate increases.
  • Consolidating Federal Loans with Private Loans is a Terrible Idea – While it is possible to consolidate your Federal loans with Private loans, that’s almost always a bad idea. First, it disqualifies you for Federal Student Loan Relief, including Forgiveness, all the different Repayment Plans, and even Forbearances and Deferrals.

How Do You Consolidate Your Loans?

This part’s easy. All you have to do is contact the banks themselves, or one of the aggregators who work with them.

They will walk you through the process, letting you know what financial information is required, what kind of package you qualify for, and what you could save by consolidating your debt today.

Be prepared for a bit of paperwork though, as the consolidation approvals process does require a credit check, employment check, lots of forms and a bit of work, but rest assured that your significantly lower monthly payments will be worth the trouble!

The most difficult part of the process is selecting the right lender, so don’t be afraid to spend some time and/or money on determining the lender that will work best for you.

Questions to Ask Consolidation Companies

To make sure you get the best deal possible, here are some things you’ll want to ask any company that you vet:

  • Will my interest rate be fixed, or variable? If variable, what will it start at, and for how long will it remain fixed? Try to lock in a fixed-rate loan if you qualify, as interest rates are lower than they’ve ever been before, and are almost guaranteed to go up in the years ahead.
  • Are there any origination fees for consolidating my loan? If there are, make sure that they aren’t too high, and shop them against the other lenders to see who’s offering the best deal. Up-front costs shouldn’t be thought of as a deal breaker, but they should be considered in your calculations.
  • Will I face pre-payment penalties for paying off the loan early? If the consolidation company has pre-payment penalties, then you may want to look at other lenders. These can dramatically inflate the total cost of your student loans, and should be avoided if possible.
  • Can I get a discount for enrolling in automatic payments? Not all companies offer this, but those that do often provide a slight interest rate decrease for enrolling in auto pay programs, making them more than worth the hassle.
  • Can I get a discount for on-time payments? Not all companies offer this either, but some will provide interest rate drops or even loan forgiveness incentives for making a certain number of payments on time.
  • Can I pay with my credit card without getting charged an additional fee? You probably don’t want to do this anyway, because credit card interest rates are typically higher than student loan interest rates, but it can be handy to have access to this option if you run into financial trouble down the line.

Additional Information

Confused about how to proceed? Want additional details not covered on this page?

Feel free to ask questions in the comments section below, and I’ll do my best to get you an answer quickly.

Please Help!

If this page was helpful for you, then please consider sharing it with friends and family!

The more people that find this website, the more time I can spend writing up content that helps you better understand what to do about your student loan debt.

Thank you so much for visiting, and thank you for your support. I really do appreciate the help!

Disclosure Statement

In the interest of full disclosure, I want to point out that I’ve got affiliate agreements with some of the company’s mentioned on this page.

If you get loans funded from any of my affiliate partners, then I will receive a small commission for having referred you to them (about $100).

Every single lender on the Internet has an affiliate program like this, but I’ve chosen to work with ONLY the lenders that I feel offer the best rates and service to visitors of my site. I regularly update this page’s content and my preferred lenders to ensure that you’re getting the best deal.

Please note that I’m not allowing that to influence my judgement of their services. I’m being 100% honest in my evaluations of each lender.

If you have any questions about my agreements with the lenders, or if you have any other questions about the company’s themselves, please feel free to reach out to me with them in the comments section below.

Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.


Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.