Repaying Student Loans: Loan Consolidation

In our final installment of Repaying Your Student Loans we will be discussing Consolidation.

Who qualifies?

Borrowers must have at least one Family Federal Education Loan (FFEL) or Direct Loan.
Your loans can’t be in their grace period if you want them included in your consolidation.
You may even be able to qualify for Consolidation if your loans are in default as long as you make the proper arrangements with the current loan holders.

Is Consolidation a Good Option For Me?

Do you have multiple loans with multiple servicers?
Do you have various types of federal loans?
Do you have a significant amount of student loan debt?
Are you having trouble making your minimum loan payments on your individual loans?
Do your loans have a variable interest rate and you would like to lock in a fixed rate?

If you answered yes to any, or all of these questions then Consolidation may be a good option for you!

What Are the Cons to Consolidation?
By choosing to consolidate all of your loans you will extend your repayment time from 10 years. By extending your repayment you will pay more interest. Also, you could lose some incentive programs if they are loan specific. Not all programs will cover loans that are consolidated.

What Are the Pros to Consolidation?
Your monthly payment will be lower and you will have only one servicer and a single payment instead of multiple payments to various lenders. The interest rate will go from variable to fixed which could help from changes. Finally, if you have FFEL loans in order to qualify for the Public Service Loan Forgiveness program you will need to consolidate with Direct to be able to participate in the program since they offer it exclusively.

As I mentioned earlier, we have now reached the end of our Student Loan Repayment series. I will be putting up a post so that I can help answer any questions that you may have. Just make sure to keep an eye out for it!

Check out the other Student Loan articles in this series!

Repaying Student Loans: Intro (Where to Start)

Repaying Student Loans: Section 1 (When do I have to pay and how much?)

Repaying Student Loans: Section 2 (Your Repayment Options)

Repaying Student Loans: Section 3 (What if I can’t make my payment?)

Repaying Student Loans: Section 4 (What if I don’t qualify for deferment?)

Repaying Student Loans: Section 5 (Can my loan be discharged?)

Repaying Student Loans: Section 6 (Loan Forgiveness Programs)

Repaying Student Loans: Section 7 (Loan Consolidations)

Repaying Student Loans: Section 8 (Questions and Answers)