
Here are some pros and cons to help you make an informed decision.
Loans that can be consolidated include direct subsidized and unsubsidized loans, subsidized and unsubsidized Stafford loans, direct PLUS loans, SLS loans, Federal Perkins loans and Health Education Assistance loans, among others.
Private education loans are not eligible for consolidation.
You may be able to extend your repayment terms, pay a lower average interest rate, reduce your monthly payment amount, fix your interest rate or simply benefit from having a singular, simplified and streamlined monthly payment amount.
However, loan consolidation is not always the answer.
Consolidating your debts down into one payment save you significant amounts of interest if you use the right consolidation tools.
Imagine taking a bunch of credit cards with 20% interest rates and dropping them to a 10% consolidation loan rate.
Debt consolidation is where you take a bunch of varied debts, varied interest rates, and varied minimum payments and pay them all off with one giant chunk of money.
You borrowed the giant chunk of money, but using it allows you to have one bill, one creditor, and one interest rate.
When I finished my graduate degree, I had five different student loans for attendance at two different universities, with various interest rates.
On top of that, most federal student loans have 10-year repayment terms, starting from six months after you graduate from college.