Consolidation is the process of combining one or more loans into a single new loan. There are advantages and disadvantages to consolidation; you should carefully consider whether loan consolidation is the best option for you.

On the one hand, loan consolidation greatly simplifies repayment by giving you one loan to repay instead of many. It can also lower your monthly payment by extending your repayment period, giving you more time to repay your loan. Additionally, depending on the type of loan you had, you may qualify for new repayment plans or be able to switch from a variable interest rate loan to a fixed interest rate loan.

On the other hand, extending your repayment period increases the amount of interest that you will pay on your loan. More payments mean more interest accrual, and that makes your student loan more expensive. You may also lose borrower benefits that accompanied your original loans, such as interest rate discounts, principal rebates, and cancellation benefits.

Once you consolidate your loans, you cannot undo the consolidation. Your old loans will be paid off and no longer exist.

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