Can I consolidate my Fedloan in with my Navient loan?

[msann]

I have 6 different loans with Navieny that I have been paying for a few years. I just finishing rehabbing 6 more loans then they were transferred to Fedloan. I am about to buy a house I really only need to show 1 Student loan payment, so possibly I can afford more house. Can I consolidate these loans into one either with Navient or Fedloan? Also, will it affect my credit?

[Anonymous]

I'm not a professional nor have I done this myself (blah, blah, blah) but here's my advice.
You've completed the rehab which I always recommend to people because it removes the default. Sometimes it even removes the lates. Now that you're back in repayment, you'll continue payment on the loans, which may be your oldest tradelines. Not only this, you'll have positive payments times 12 (if I understand your post). 12 good payments per month will only help your credit. Additionally, if you sign up for an Income-driven repayment plan for some loans they can use your monthly payment as a part of the calculations instead of the total debt owed.
Also, to consolidate, you'll end up with a brand new loan, at 100% utilization, for the total you owe. This is not a positive on your credit. Any payments you would have made towards loan forgiveness would be lost too.
I think you should talk to a mortgage professional before you make a big decision such as consolidation. I don't think you need to do it...in fact I think it would probably only lower your score, in theory. You might find that with a simple switch in payment plans, if you're not already on IDR, will benefit you more.

[Anonymous]

Do not consolidate, you lose points right after a consolidation.  If you want a lower payment to afford more house then you need to call FedLoan and change your repayment term but keep that line open because the age of the account is better than consolidating and starting a new line and lowering your age of accounts average.

[msann]

This has been so valuable. Thank you!

[AZEsq]

Yes you can consolidate them and yes it will affect your credit. It will create a new account and close an old account. It may also affect your debt ratios as your interest would be consolidated that is outstanding due to any IBR or IDR you are on, prior to the consolidation as noted above.

This is something that you need to do if you intend to participate in PSLF or if you're disorganized and know you can't manage multiple loans with multiple due dates--you don't say why you were in default so if this is an issue, it's something to consider. Otherwise, if the rates are low, it may be worth it to consider leaving them separate OR, if you're in the private sector and looking to do a quick paydown, getting your scores up and going for a full low-interest consolidation with a bank or lender like SoFi who can get you far better rates than MyFedLoan. If you're doing PSLF, you'll probably HAVE to consolidate. If you've just rehabbed it, you likely have no payments that count as qualifying payments, but if you do, you really want to discuss with them the effect of consolidation. On a new loan, you may lose any qualifying payments and would want to exclude anything already with MyFedLoan from consolidation.

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@msann wrote:
I have 6 different loans with Navieny that I have been paying for a few years. I just finishing rehabbing 6 more loans then they were transferred to Fedloan. I am about to buy a house I really only need to show 1 Student loan payment, so possibly I can afford more house. Can I consolidate these loans into one either with Navient or Fedloan? Also, will it affect my credit?

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[Anonymous]

Actually, you do not have to consolidate to have PSLF. This was one of the major contributing factor that led to people not getting forgiveness. It will absolutely reset your count. The only reason someone would consolidate with PSLF is if they had specific loan types that did not qualify. For those that do, many have chosen to simply exclude then from the forgiveness rather than reset what could be years of payments. The only requirement of PSLF in terms of plans is that the majority of the payments just be on IDR.
Rehabbing does not affect how many qualifying payments a person has made so far. It is quite possible to have made them and not know it, and they do not need to be continuous payments. Consolidation would lead to a reset on any forgiveness plan.

[AZEsq]

She absolutely will have to consolidate IF her loan was not a Direct loan. Navient is not only a federal loan servicer. If the loan is not direct, there are no qualifying PSLF payments! See: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#eligible-loans

The government websites are very difficult to use, but all of the information is there. Better to read it than go off of what a CSR tells you, 90% of the time, they're wrong. PSLF is a cumbersome nightmare of a program and deliberately so...

[Anonymous]

AZEsq:
That is what I just said.

"The only reason someone would consolidate with PSLF is if they had specific loan types that did not qualify."

I also said that it is not, to my knowledge, necessary to consolidate all of the loans if a few don't qualify. Only 2 or more are required out of default. One borrower I talked to ended up leaving 1 loan out of the final/ only PSLF application to the gov and just decided to pay the remaining balance. It is also not advised to consolidate loans in an effort to be safe if you've already made payments as those qualifying payments will be wiped. Some major issues with PSLF were that people did not consolidate non-qualifying loan types but also that they had reset their counts with unnecessary consolidation.
Imo it is very important that people read up on the rules but in addition people should read about how people in their similar situation did not achieve success in order to avoid those mistakes.