Pros and Cons of Student Loan Consolidation

Are you considering student loan consolidation?Before you choose to consolidate your debts, it is important for you to know the advantages and drawbacks of this repayment option.What are the pros and cons of student loan consolidation?The Advantages:• Your interest rate is not affected even if the prevailing rate soars
• You can consolidate multiple college loans into one with a lower interest rate. Aside from a lighter debt burden, you’ll just be writing fewer checks at the end of each month.
• Extend your repayment term for a lower monthly payment
• Consolidating your liabilities will not stop the (US) government from continuing to pay for the interest rate, if this is the case for your particular educational loan.
• You have the choice of consolidating all or just some of your debts.
• You can make payments lower and more affordable by consolidating especially if you have defaulted on your payments.
• It’s possible to consolidate your college loan with your partner or spouse to make your monthly payments lower than what you’ll be paying separately.
• Debt consolidation will let you deal with just one organization or company for any questions or issues regarding your liabilities.
• You don’t have to worry about prepayment penalties, bank fees or credit bureau checks.The Drawbacks:• Extending your payment term increases the overall cost of your educational loan
• You can’t re-consolidate if the prevailing rate proves to be lower than the rate you are stuck on paying.
• In private bank debt consolidations, you will most likely lose cancellation, deferment, forgiveness, and forbearance options.
• Student loan consolidation disables your ‘grace period’ so you’ll have to start payment right away.