If you are struggling to manage your student loan payments, you are not alone. Millions of Americans have found themselves with tens of thousands of dollars or more in student loan debt. Although the significant amount of debt can be overwhelming, managing the multiple monthly payments can be challenging. In addition to the hassle of making multiple monthly payments, many people struggle just to make the minimum monthly payment for each private or federal student loan debt they have.
Federal Student Loans
There are a limited number of lenders who offer federal student loan consolidation services, and your best option for consolidating federal loans is to go through the Direct Consolidation Loan program offered by the federal government. This will protect your loan benefits while allowing you to reduce the number and the amount of monthly payments. Some may choose to consolidate their federal student loans through the government, and then take out a separate consolidation loan for their private student loan debt. Capital One does not offer federal student loan consolidation.
Private Student Loans
Capital One does not specifically offer private student loan consolidation, but if you own a home, you can consolidate your private loans into a home equity loan. The only loans offered by Capital One are home equity and auto loans or refinancing. Many recent graduates may not own a home, so this may not be a feasible option; however, it may apply to some recent graduates in addition to those who have been making payments on their student loan debt for several years.
Home Equity Loan
The benefit of a home equity loan is that they tend to have low interest and annual percentage rates (APR). The downfall, though, is that you have to use your house to secure the loan. This means that if you default on the loan, the lender can take possession of your house. If you are considering using a home equity loan to consolidate your private student loans, be sure to understand the loan details and requirements.
Find the Best Consolidation Option for You
If you have both federal and private student loan debt, you may want to do some research to find a lender who will allow you to consolidate all of your student loan debt. Although consolidating federal and private loans separately is a reasonable alternative, it will be much easier to manage one single consolidation loan payment.