The Education Department allows borrowers with bad credit to consolidate federal student loans. Finding a private lender willing to do the same is nearly impossible.
Student loan consolidation is possible with a low credit score if you’re consolidating federal loans. The U.S. Department of Education doesn’t run a credit check as part of the application process. Instead, the department will review your account to ensure you have eligible loans and that you don’t have a wage garnishment or a judgment for a defaulted federal student loan.
In contrast, private lenders have tighter lending guidelines for private student loan consolidation and refinancing. Lenders prefer borrowers with excellent credit, a long credit history, good income, and a low debt-to-income ratio. If your credit score is below 680, you’ll typically need a cosigner to help push your loan application through.
And if you’re delinquent or in default? One of the only refinancing options available is a new online lender, Yrefy.
Ahead, learn how to consolidate federal student loans with bad credit and options for your private loans if refinancing isn’t an option.
Learn More: How to Refinance Student Loans With Bad Credit