Can I Consolidate My Student Loan Debt and Credit Card Debt?

It’s no secret that across the United States, debt is a big issue for many American families. Debt comes in many forms including car loans, mortgages, credit card debt, and student loans. The average family carries approximately $16,000 in credit card debt while the average college graduate carries $37,000 in student loans. With so much at stake, many people are turning to alternative financing options to relieve the burden of their debts. When doing so, one common question many people ask is “Can I consolidate my student loan debt and credit card debt into one monthly payment?”

Here, we’re going to consider some of the best options for reducing both your student loan and credit card debt so you can get ahead of the game.

What Are the Benefits of Debt Consolidation?

Over the course of one’s life, debt can be a crippling burden that prevents people from reaching their goals. One method for reducing the burden of debt is consolidation. The most notable benefits of debt consolidation include:

  • Possibility for lower interest rates
  • Possibility for lower monthly payments
  • In some cases, shorter loan terms

Although it’s a great idea to find a faster way to pay off your debt, it’s important to evaluate all your options before signing on the dotted line. Consolidating your debt without understanding the terms of the loan can lead you to pay more money in the end or taking on additional debt.

Understanding Debt Refinancing Options

There are options for consolidating multiple types of debt, including credit card debt and student loans. Some of the most effective debt consolidation options include private loans and loan refinancing. It’s important to understand that each option has its own benefits and serves a unique purpose in the life of paying down debt. Consolidation is for combining multiple debts, whereas refinancing is typically used to alter the terms of a single debt.

Before you consolidate or refinance any of your credit card debt or student loans, it’s important to consult a professional regarding your options. A private debt counselor or debt attorney can walk you through each of your debts and help you understand the benefits and implications of consolidation vs. refinancing vs. balance reduction options such as settlement.

What Are the Benefits of Consolidating Credit Cards?

Credit card debt and student loan debt can be consolidated into one monthly payment. Because the two debts are extremely different, however, it’s not always in your best interest to do so. One of the most notable reasons why it isn’t wise to consolidate credit card debt and student loans is that federal student loans typically have a lower interest rate than you can obtain via a private loan. Therefore, if you consolidate credit card debt with a student loan, you will likely end up paying more for the student loan than you would on your original plan. Furthermore, it’s difficult to obtain a private loan amount for more than the balance of your current student loans.

If you’re looking to consolidate debt to save money, it may be in your best interest to consolidate your credit card debt and reduce the interest rate, if possible, so you have one low monthly payment.

Why You Should Refinance Your Student Loans

When it comes to taking care of your student loan debt, the best option you have is refinancing. Refinancing allows you to alter the terms of your debt under a new loan that fits into your budget. One of the most common reasons people choose to refinance their student loans is to make their monthly payments more affordable. This does not always mean, however, that they will pay less over the life of their loan.

While these consolidation options can lower your monthly payment, they do nothing to reduce the balance that you owe.  The only way to reduce the balance of your student loans is through a settlement plan.

If you choose to refinance your student loans, you should know that your new loan cannot be used to pay off anything besides student loan debt unless specifically outlined in the loan agreement.  Another concern comes from consolidating federal loans, which may be eligibly for income based repayment options, into a private consolidation loan which is no longer eligible for special repayment programs or terms.

Debt Lawyers Can Help You Reduce What You Owe

For a viable strategy that works to reduce your student loan debt, talk to the attorneys at McCarthy Law PLC. Our team is dedicated to helping you negotiate your debt to a fraction of what you owe and will work tirelessly in your favor. We bring years of experience to the table and offer low prices for our services so you can benefit from what we do and move on with your life. As lawyers, we can also help you if there’s a lawsuit at hand or if you’re involved with collection agencies.

To schedule a consultation with a real attorney, call 855-976-5777 or contact us online today. Don’t wait any longer. Start forging your own debt-free path today!

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Jacob Hippensteel

Jacob Hippensteel

Jacob Hippensteel focuses his practice on consumer protection and business litigation. Jacob regularly assists clients by ensuring that their rights as consumers are protected under Federal and State consumer protection laws. Jacob regularly advises clients on a wide variety of issues, as well as protecting those client’s interests in federal and state courts.