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.Your grace period on some loans could end prematurely, or you may end up consolidating at the wrong time – too early or too late.Not all student loan debts can be consolidated, although most federal loans can.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.That means that you have various loans, and all of them have a 10-year repayment schedule. I got a lower rate and a lower payment, since my total repayment term had been extended to 25 years.My monthly payments, all added together, ended up being right around 0 a month. Consolidation has worked well for me, and it can work well for many students, as long as you understand the risks.
Refinancing works in somewhat the same way as consolidation, except private lenders (and not the federal government) offer refinancing of your federal or private loans into one loan.
You may end up paying more in total interest after you consolidate your student loan debts.
You could lose some of the benefits from your subsidized student loans.
There are both benefits and drawbacks to consolidating your loans, which we’ll discuss in this article.
Choosing to consolidate your loans is an individual choice and the right decision will depend on the specifics of your loans — the types of loans, interest rates, balances, borrower benefits, and more — as well as your current financial situation.