Private Loan Consolidation FAQ

General

What is student loan consolidation?

Student loan consolidation allows you to combine one or more existing student loans into a single new loan.

  • It is a convenient, affordable way to repay your education loans.
  • Based on the total educational loan indebtedness, extended repayment term allows for a lower monthly payment.
  • Makes managing your debt easier with just one payment to just one lender.


How do I apply for a private consolidation loan?


  • If an AES originating lender contacted you regarding private loan consolidation, refer to the telephone number or website address provided on the solicitation.
  • If you have not been contacted regarding private loan consolidation:
    1. Call 1-800-338-5000 to speak with an AES customer service representative.
    2. Complete your application over the phone.


Can AES tell me what my interest rate, fee and monthly payment will be?

When initially calling, the AES customer service representative will be able to tell you what potential interest rates and fees may be.

In order to get a definitive interest rate and fee amount, you will need to complete a credit application over the phone with the AES representative, as the rates and fees are normally based off of the applicant’s credit score.

What information will I need in order to complete a credit application over the phone?


  • Social Security Number
  • Driver's license number
  • Domestic physical address
  • Two references and their addresses
    (Note: The addresses of these references must be different from each other and from your own address)
  • Your underlying loan information (Loan balance, loan program type, interest rate and where the loan is being serviced)
  • Monthly mortgage or rental payment information
  • Total monthly debt (car payments, credit cards, etc.) not including monthly utility payments
  • Employment and salary information
  • Amounts of other income received

What if I do not know where all of my private loans are serviced?

Unless all of your loans are serviced at AES, we will not be able to determine this for you. Contact your school’s financial aid office to obtain records of where the loans were originated.

If I am unsatisfied with the interest rate and fee structure after completing my over-the-phone credit application, am I required to follow through with the consolidation?

No. We need your signed loan request/credit agreement in order to complete the consolidation.

AES will mail your loan request/credit agreement the next business day after completing the over-the-phone application. If you are not interested, you can simply disregard the application and not return the signed document.

What happens after I apply?

After completing your over-the-phone application:

  • AES will mail your loan request/credit agreement the next business day:
    1. Review your application
    2. Sign it
    3. Return it to AES Graduate and Professional Services
  • AES Graduate and Professional Services will process your application and contact your existing loan holders, requesting a loan pay-off.
  • The old loans are paid off based on the information reported by your loan holders; the balances are transferred to a new loan.
  • When your private loans are paid in full, through consolidation, we will send you a Truth in Lending Disclosure Statement which outlines the term, balance and monthly payment amount of your new loan.
  • We send your first billing statement for your consolidation loan.

Note: The consolidation process takes approximately 6-8 weeks. During this time it is important that you continue to pay the student loan bills you receive.

How will my private consolidation lender be determined?

  • If an AES originating lender contacted you and you are interested in their program, you will be given that lender.
  • If you contact AES without any previous solicitation, your lender will be determined by who your current loan holder is. For example, if NCT currently owns your loans then we will offer you a private consolidation with NCT.

If I am denied for private consolidation, can I reapply with a co-signer?

Each lender has different guidelines, but all have a minimum credit score you must meet in order to be eligible to add a cosigner.

Is there a limit on the number of times I can apply?

No. Keep in mind, however, that an inquiry will display on your credit report each time you apply.

How do I find the status of my consolidation?

Call our automated telephone system toll-free at 1-800-338-5000 to obtain loan information, including the application date, estimated processing time and any information required to process your request.

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Eligibility

What loans are eligible for private consolidation?


  • Any private loan used for educational purposes, in most cases.
  • The purpose of the loan must be necessary in order to complete certification; i.e., loans used for education received at a post secondary educational institution or for residency or bar examination.
  • These loans must be in repayment, deferment, forbearance or a grace period.


What is the credit criterion?

This depends on the private consolidating lender. Most common factors for determining eligibility include:

  • Credit score;
  • Debt to income ratio; and
  • Amount of revolving debt.


Can I consolidate my loans with my spouse?

  • No - In most cases. Your spouse may be a co-signer, however.
  • Yes - If at least one of the underlying private loans is owned by KeyBank, you may consolidate loans with a spouse or a co-applicant of your choice.

Can I consolidate my private and federal loans together?

This depends on the current lender of your underlying private loans. Call us at 1-800-338-5000 for more details.

Find out more about consolidating your federal loans.

Can I consolidate my private loans while I am in school?

No. Your loans must be in repayment, grace, forbearance or deferment.

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Terms

Is there a minimum or maximum balance requirement for private loan consolidation?

  • All private consolidation products originated at AES have a minimum balance requirement of $7,500.00.
  • There are maximum balance requirements in some cases. Call 1-800-338-5000 for further details.

Will the interest rate be fixed?

No. Most private consolidation programs only offer variable interest rates. These rates can change quarterly or monthly, depending upon the program.

How is the interest rate determined?

This depends on the program.

Interest rates for all AES programs are determined by the 3-month or Monthly London Interbank Offered Rate (LIBOR), plus an additional margin. In many cases, the additional margin is determined by the applicant’s credit score.


What interest rate reductions are available?

Some private consolidation lenders offer additional rate reduction incentives for automatic debit payments. Call 1-800-338-5000 for more details.

Are there any fees for a private consolidation loan?

In most cases, yes. The fee is determined by the applicant’s credit score.

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Advantages & Disadvantages

What are the advantages of private consolidation?


  • Single, lower monthly payments to one lender
  • Origination fees as low as 0% based on credit score
  • Longer repayment period
  • No prepayment penalties
  • No co-signer needed

What are the disadvantages of private consolidation?


  • Longer repayment period
  • Greater interest paid over the life of the loan because you are making smaller payments over a longer period of time
  • Possibility of limited deferment or forbearance options
  • May lose current loan incentives


Are there any incentives offered?

Yes. Incentives will differ depending on the lender you are consolidating with. Call 1-800-338-5000 for more details.

Will consolidating my debt hurt my credit?

No. Student loan consolidation is not a debt counseling service and will not hurt your credit.

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Repayment

Are there any prepayment penalties?

No, advance payments can be made with no penalty to the borrower.

Can I stop making payments if I go back to school?

No. None of our private consolidation programs offer in-school deferment or forbearance.

Can I use direct debit once I consolidate my private loans?

Yes. However, some private consolidation lenders do not offer any additional incentives for doing so. Call 1-800-338-5000 for more details.

When does repayment begin?

  • Repayment of your consolidation loan begins within 30 to 60 days of the loan fund payout.
  • You will receive a disclosure statement and your first bill.

What is the repayment term?

Repayment terms are different for all private consolidation programs. Most offer a 30-year program, as long as the minimum monthly payment is met.

What are my repayment options?

Each program is different. Call 1-800-338-5000 for more information about repayment options.

Can I change my repayment plan later?

It depends on the lender.

Is there a minimum monthly payment?

Yes. However, minimum monthly payments depend on the lender.

Can I get deferment or forbearance for a private consolidation loan?

Deferment is not offered on any private consolidation program originated at AES. Forbearance is offered on some of the programs originated at AES. You will need to contact us at 1-800-338-5000 to determine if your lender offers a private consolidation product with this option.

Do consolidation loans have a grace period?

No.

Will my direct debit arrangement be affected?

Yes. Even if you already have a direct debit arrangement for your current AES-serviced loans, you will be required to submit a new direct debit request form for your consolidation loan.

We will include this form with your Truth In Lending Disclosure Statement upon payout of your consolidation loan.

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