Government Student Loan Consolidation

After graduating from college, some people find they have multiple loan payments due every month and in some cases, these payments may be difficult to meet. Government student loan consolidation may be helpful. This means the numerous loans are combined into a single loan. This does not change the total amount owed, however it is possible to reduce the monthly payment amount which can be helpful for those on a budget. If you are having trouble meeting your monthly expenses it may be especially difficult to make timely payments on your student loans. One thing you should know about extending the loan is that interest rates may be higher on a longer loan which might actually increase the total amount you are paying. Depending on the level of your financial hardship, higher rates may be worth it for lower monthly payments.

Government student loan consolidation can be a practical thing because it is easier to make one payment rather than multiple payments each month. Consolidation may be the course of action after a student has used other avenues after loan deferments. Loan deferments delay the payments during a time of financial hardship. When a loan is consolidated, history of deferments and even forbearances are wiped away. Another reason to consolidate is to change lenders. You may find a lender who offers a favorable rate and term, who can put all your loans into one loan and save you money on your payments every month. On the subject of lenders, shop around before choosing one to make sure you're getting the best consolidation deal possible.

Although there are advantages of consolidating student loans, there are also potential disadvantages. As previously mentioned, if the loan term is extended the interest will have more time to accrue, which means the total amount paid will be more. Depending on the lender and the loan terms, other advantages like grace periods and subsidized interest may not be available. It should also be noted that government student loan consolidation can only be done once, so it is important to choose the right time to consolidate. You may want to speak to a loan officer or financial advisor about whether or not consolidation is the right choice for you.

Speaking to an advisor or expert of some sort is a good idea for any borrower before making a final decision regarding government student loan consolidation. In some cases, borrowers may have other options available to them if they need help with student loan repayment. For example, you may be able to negotiate payment extensions and lower payments with each creditor. This is more of a hassle, but it can prevent you from having to go through consolidation unless you really have to. Consolidation isn't necessarily a bad thing, in fact it can be a good thing for some graduates. The key is to know whether or not consolidation is going to solve your student loan debt issues or cause more problems for you. This is different for every borrower, for some consolidation is unnecessary because there are better alternatives available, for others consolidation is the ideal step to take.

The first step if you do decide that consolidation is right for you is to choose a consolidation company. You can look for consolidation loans at banks, credit unions and other lenders. You might even want to call the Department of Education or check their website for more information about choosing the right lender to consolidate your student debt. They have a variety of helpful resources for students and graduates with financial questions. You can find out more about what consolidation is, how the process is done, and so on.