Should I consolidate my student loans?
One of the most frequent questions we receive here at College Financing Group is whether or not a borrower should consolidate their student loans. For some people, this can be a great way to lock in a lower interest rate, extend the loan repayment period, reduce their monthly payments, and avoid having to pay multiple lenders each month.
But consolidation is not for everyone. You should definitely make sure you understand the the pros and cons of student loan consolidation before taking this step.
Ready for Zero recently published a great post on the subject. Through the Federal Loan Consolidation Program, the author was able to consolidate a $17,125 loan at an incredibly low 2.625% interest rate. But carefully planned her repayment strategy–she didn’t consolidate all of her loans because she would have lost some interest rate reduction benefits from other lenders, and in some cases it made more sense for her to pay off other loans separately.
The author’s situation represents the uniqueness of the consolidation question for every individual. There are advantages and disadvantages to consolidating your loans, and whether or not it’s the right thing to do depends on several factors. It’s impossible for us to recommend consolidation to a client without carefully looking at each of their student loans, what benefits they are receiving, repayment terms, and the individual’s current and future financial situation.
Is consolidation right for me?
If you’re interested in learning more about consolidation and need help deciding whether this strategy would benefit you, give us a call at 1-888-234-3907 or contact us. It may be that consolidating all or some of your loans makes sense–or a completely different strategy might benefit you even more. And check out our resources and blog for more student loan repayment strategies.