If you’re like most people with student loan debt, then you probably had to get multiple loans to cover all of the expenses that come along while attending college. It ain’t cheap after all, and you never want to borrow any more than necessary.
Having multiple individual loans isn’t a big deal, but you may have an opportunity to save yourself some money each month by consolidating all of the student loans into a single one. There are benefits to doing this, such as reducing interest rates or just the convenience of only having to manage a single loan instead of multiple ones. You may also have loans with different companies, which can add some complexity to managing your student debt.
Beyond the benefits of saving money and convenience, there could also be a down side to consolidating or refinancing your student loans. The first is that you will usually be extending the payment period. That may not be a concern to you, but consolidating student loans can also cause you to lose certain borrower benefits–such as principal rebates, interest rate discounts, or loan cancellation benefits—that may be associated with your current loans. You could also lose any income-driven repayment plan forgiveness or Public Service Loan Forgiveness if you participating in one of these programs.
When it comes to refinancing or consolidating your student loan debt, be sure that you do your homework and are aware of any benefits that you may be walking away from before moving forward. The benefits of consolidating your student loans could save you money each month, if the rate is lower and the payment is work better for you.
For more information regarding consolidating your loans, visit www.studentaid.ed.gov