[Student Loan] Consolidation Can Lower Your Monthly Student Loan Payment

October 19, 2011 – 7:24 pm

Article by Armand Gray

Some students leave college and you expect them to heave a sigh of relief because at long last the long hurdle is over. No more sleepless nights studying for lessons, no more academic books to read, no more exams to take and most of all no more tuition fees to be paid. But what if the student just relied on Student Loans all throughout his or her studies? That must have been a lot of loans to pay. Fortunately there is a thing called student loan consolidation.

Student loan consolidation is combining all previous loans into one loan to make it easier for the students to pay the debts. If your loans are consolidated, you need not pay multiple loans every month, you only have a single loan to pay and this makes it less confusing and burdensome.

Through consolidation, a student or a graduate can have some sort of relief. Most student fret and think of their loans while still studying and often miss out on their education. On the other hand, fresh graduates that are in debt could not focus or advance in their careers because they have this huge debt to pay.

You may be wondering if student loan consolidation is a good idea. Here are a few reasons why you should consider consolidating your loans –

It lowers your monthly payment

Often times if a student has multiple loans to pay, it means paying higher as the student is paying for interest for multiple loans.

Lower interest rates

Consolidation offers students a fixed monthly interest that is usually lower than the interest rates of their previous loans.

New interest rates

Consolidating your loans will most likely mean that you are going to have a new interest rate. You may get lower interest rates because interest rates these days are decreasing.

More convenient payment scheme Because all the previous loans are combined into one, payment is easier and more convenient when student loans are consolidated.

Helps you save more money

Typically, consolidating your loans can help you reduce your monthly payments to as much as 54 percent depending on the interest rates. But no matter what the interest rate, bottom-line is your still going to save money.

Extends repayment period

Usually consolidation gives the students more time to pay their debts. This is a good thing so students wont feel pressured to pay their consolidated loans because it lowers the monthly payment.

Different types of loans can be consolidated

Student consolidation is not only limited to one or two types of loans. There are actually a lot of different types of loans that can be consolidated. Some loans that can be consolidated are direct subsidized and unsubsidized loans, federal insured student loans, federal Perkins loans, national defense student loans, etc.

While student loan consolidation provides a lot of advantages, there is also a negative side to it. You may want to consider these disadvantages before deciding to consolidate your loans.

Increases overall total amount paid Because consolidating all your loans extends repayment period, it will lower your monthly payments but this will result in an increased overall total amount paid.

Lose incentives

If you consolidate all your loans you may lose several incentives that are offered to you by your lenders.

Lose benefits for Perkins loans Consolidating Perkins loans means cancellation of your benefits and losing interest subsidy.

Reading the pros and cons of student consolidation may have given you an idea on whether or not consolidation is a good idea. The advantages obviously surpass the disadvantages but it is still up to you if you want to consolidate your loans.

Before indulging in the consolidation scene, you need to do research on that consolidation companies offer the best deals and will really help you lower your payments.

The best way to research is through the internet because you will be able to compare different plans conveniently. You can find information and news on consolidation. Some sites even offer quotes and this makes it easier for you to compare and choose among different companies.


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