Consolidating those loans into a single new one can simplify your payments, especially if your loans are with different loan servicers, the companies that oversee your payments.
It can also be a way to get into repayment plans you otherwise wouldn't be eligible for.
Once you finish college, you are likely to look at all of your student loan payments and sigh: How are you supposed to keep all of them straight? This is when many people start weighing the pros and cons of consolidating student loans.
Among the inconveniences of student loans is that each loan that you receive for each school year is often considered a different loan — and it has to be repaid separately, with its own interest rate.
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.
Federal student loans can be consolidated through the U. Some lenders, like Alliant, will consolidate both federal and private student loans.One of the myths of consolidation is that it makes your debt less expensive by lowering your interest rate.Historically, that may have been accurate, since consolidation was often used as a way to lock in a low interest rate on variable-rate loans, says financial aid expert Mark Kantrowitz.When you consolidate your private and federal loans through a credit union or bank, you could be offered a rate that is lower than what you’re paying right now.But, consolidating student loans is not right for everyone.