How to Consolidate Student Loans after Getting Married

You can consolidate student loans to provide a more streamlined payment option and perhaps even save money on interest rates. Consolidation is the process of taking one new loan to pay off your existing debt; in the future, this one loan acts as the only source of student debt. If you have been married since taking on your debts, you may want to add your spouse to the consolidation loan. This is not always advantageous, but it may be considered in some cases.

Joint Debt after Marriage

Joint debt is shared between two or more people. It is not the same as using a cosigner. In that case, the cosigner will only be held responsible if the primary borrower fails to make payments. In a joint debt, both parties are equally responsible for the loan. The most common form of joint debt is a joint mortgage. In most cases, there will be no advantage to adding a debt holder to a student loan. The only situation where this would be necessary is if the single debtor does not have an income large enough to secure a consolidation loan. In that case, the incomes of both spouses may be combined on the consolidation application.

Consolidating Student Debt

Consolidating student debt across semesters or years means you will be replacing many small loans with one large loan. If you have federal student loans, this process is simple, and you will not likely need to add a second debtor to the contract. Private student loans may be more challenging to consolidate. If you are taking a third party loan in order to pay off previous student debts, you may find there is an advantage to using both spouses for the application in order to receive higher loan limits.

Adding a Debtor to a Loan

Adding your spouse as a debtor can only be done when the loan is actually sourced; otherwise, you will have to modify the contract in order to add a second debtor. The combined income of both applicants will be used to set limits. However, only the credit score of the highest earning applicant is typically used to source the loan. Most lenders will require you are officially married or have a domestic partnership before providing this option to prevent you from simply manipulating the system. If you do happen to separate in the future, the joint debt will need to be resolved through a new contract.

Maintaining a Single Debtor

It is typically easiest to maintain a single debtor on a student loan consolidation. Student loans are distributed in many different installments, so student loan lenders are used to consolidating these installments for borrowers. Before you consider adding a second debtor, try to consolidate the loans independently. You will likely see less penalties and find a greater ease in the process. Since the debts were incurred before the marriage, it makes sense to keep them in the name of one spouse. This prevents complications in the case of a separation or divorce.

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