Pros and cons to consolidating loans
You can extend repayment or graduate your repayments, for example.
It is also possible to move into an alternate repayment plan to accommodate your changing life circumstances.
Maybe standard, 10-year repayment plans are no longer the best option for you.
Loans that can be consolidated include direct subsidized and unsubsidized loans, subsidized and unsubsidized Stafford loans, direct PLUS loans, SLS loans, Federal Perkins loans and Health Education Assistance loans, among others.
The most obvious benefit of a consolidation loan is that you can replace your multiple loan payments with a single payment.
Sometimes, you can fix a lower interest rate to that single payment than the average rate that you were paying on your other multiple loans, which is especially beneficial if you are able to turn variable rate loans into a single, fixed, low-interest rate loan.
Your grace period on some loans could end prematurely, or you may end up consolidating at the wrong time – too early or too late.
Not all student loan debts can be consolidated, although most federal loans can.
You may be able to extend your repayment terms, pay a lower average interest rate, reduce your monthly payment amount, fix your interest rate or simply benefit from having a singular, simplified and streamlined monthly payment amount.However, loan consolidation is not always the answer.