Student loan consolidation is something that is often thought about after college graduation, in fact many college graduates assume that consolidating their student loans is the next logical step, when in fact, this may not always be the best move. Student loan consolidation may or may not be the right move for you based upon your specific financial situation. Student loan consolidation should be something that is considered and researched carefully to ensure that you are making the best financial decision for your specific situation. Let’s take a look at some of the Pros and Cons of Student Loan Consolidation:
The Pros of Student Loan Consolidation:
1. With student loan consolidation you will have 1 monthly student loan payment, which may be a reduction in price to what you are paying currently by extending the length of the loan repayment.
2. If you have variable rate student loans, you may get a reduction in interest rate, and have the ability to lock into a fixed interest rate.
The Cons of Student Loan Consolidation:
1. By extending the loan repayment length and lowering your monthly payment, you will in fact pay more over the lifetime of the loan.
2. If you consolidate your federal student loans into a private consolidation loan, you will forfeit all of your federal student loan rights (NEVER DO THIS!)
One of the most important things to remember when it comes to student loan consolidation, is to never consolidate your federal student loans into a private consolidation loan. You must consolidate your federal student loans into a federal consolidation loan, and your private student loans into a private consolidation loan.