Consolidate My Child’s Student Loans
Can I consolidate my child’s student loans? The answer is generally that you can, but it depends but there are many different ways to deal with the issue.
Student loans cannot generally be discharged in bankruptcy. As a result, many lenders are more willing to give them than they are with other loans. The reason? It is a pretty good bet they will get paid sooner or later. At least, this is the way it was. The credit and banking crisis has made things a bit dubious in this regard.
The first step to consolidating a child’s student loans is to simply contact the big lenders you see in advertisements. If they give primary loans, they almost always have consolidation programs. A child who has graduated college will often have little problem getting a consolidation deal unless they have horrific credit or no job. If that is the case, you need to move to the next step.
You can go ahead and co-sign any consolidation loan. Just because you can, however, doesn’t mean you necessarily should. When you c-sign student loans or any loan for that matter, you are personally guaranteeing the repayment. If your kid doesn’t pay, you are on the hook. If they lose their job and are short on money, you have to make those payments. If you don’t, the government and creditors will come after you and your credit rating could be destroyed.
You can also think outside of the box on the issue of consolidation. Some parents will refinance their home or take a credit line and pay of the loans. The child must then repay the parents on a more manageable payment plan. The same can be done with 401k loans and the like. The key, obviously, is to make sure your son or daughter is actually making the payments.
Can I consolidate my child’s student loans? Yes, but think through the best way to do it before you just leap in to the consolidation void.
