Loan Consolidation

Student loan consolidation is a useful tool that can be used to combine existing federal student loans into a single loan with one monthly payment. However, consolidation is not for everyone.

Consolidation loans offer a fixed interest rate and the possibility for lower monthly payments by extending the repayment period. However, the interest rate may be slightly higher and borrowers normally pay more in interest over the life of the loan by extending the repayment period. Borrowers could also lose some benefits on existing loans by taking out a new consolidation loan that does not offer those same benefits.

Borrowers should research and understand all of their options before making this important decision on whether to consolidate their loans. Information can be found at the U.S. Department of Education Direct Loan Consolidation web site at www.loanconsolidation.ed.gov.