As you make plans for repaying your student loans, you may be considering loan consolidation as an option. Consolidation allows you to pay off some or all of your existing student loans by combining them into a single, large loan. There are two types of consolidation programs for education loans:
Loan consolidation may lower your total monthly repayment amount. However, any consolidation loan is also likely to significantly increase the total amount of interest that you will be required to pay. You may also lose any remaining grace period on your consolidated loans. If you are able to meet your current monthly repayment obligations, it may be best for you to avoid consolidation.
You may want to estimate the amount that you can afford to pay on a federal consolidation loan based on your monthly income, using the U.S. Department of Education’s Online Calculator. Additional information about consolidation can be found on the Department of Education’s website for Loan Consolidation.
Last update: October 15, 2013 1:44 PM