Student Loan Consolidation: 

Is It A Good Thing?

Did you know that consolidating your student loan is one of the smartest things that you can do? You should consider a student consolidation loan if you have several federal student loans or even if you have one large one.

Student consolidation loans will have fixed interest rates which are similar to those that are the rates of the loans that are being consolidated.  The amount that you can save through these consolidations can be up to 58%. 

Federal Stafford loans, Federal Direct Loans, Federal Perkins Loans as well as many others can be consolidated.  Most of the time, they already have low rates on them.

Advantages

• You will produce one new loan payment which is often lower than what you are currently paying. 
• It is easy to do. 
• It will help to lower your debt burden.
• You can take advantage of the lowest interest rate at the time. 
• It can help you to qualify for new or renewed deferments.

What To Think About

When you consider consolidation, you should insure that the interest rate that you are being offered is lower than your current rate. You want to pay off your student debt easier and maybe even quicker too.

While consolidation can simplify the loan repayment process and it lower your monthly payment, in the long run they usually increase the total amount that you will have to pay.

Student loan consolidations provide lower monthly payments by allowing you to spread the loan over 30 years in some cases. You are paying more payments then as well as more interest. Make sure to compare the cost of repaying your unconsolidated loans with the cost of repaying them through the consolidation loan.

The process of consolidating is very flexible. Consolidation is always available from the time you graduate down through the years of repayment. First, you need to gather information about your current loan. You need to know the balances and the interest rates, the names and addresses of companies and the names and addresses of personal references.

The National Student Loan Data System can help provide you with the information that you need since it holds the most complete and accurate information for federal loans.

Paying Them Back

You will have 2 options to pay these loans back. 

First, you will be responsible for paying a standard amount each month. This will include principle and interest. This is the lowest cost of interest paid way to go. 

Or you can go with graduated repayment. In this method, you start with lower payments that are only interest, but then they will keep increasing.

Most of the time, your student consolidation loans will begin repayment in 60 days. You can have from 10 years to 30 to pay it back.

There are some questions that you should ask the lender of the loan before going forward.

• Is there any interest rate reduction, for example if you make your payments online or on time?
  
• Will the lender provide a loan that meets your specific needs?
  
• Are they giving you the best interest rate available?

To get a student loan consolidation, you can still be enrolled in school.  But, in most cases, you will be graduated.  Nevertheless, you can find many options in lenders and loans to fit your needs specifically.