College tuition is on the rise and both students and parents are seeking additional methods to help pay for the soaring costs. Student loans, grants, work-study and scholarships are common ways to supplement or completely pay for the cost of college.Student loans are probably the most popular of financial aid sources. It is quite usual for a single student to take out multiple loans to cover the many expenses of a college education – tuition, books, dorm, transportation, etc.At the end of a college student’s career, many students often find themselves facing a daunting load of financial payments which start after a six to nine month grace period after graduation.Many students turn to College Loan Consolidation to reduce the stress of multiple, high payments, opting for the lower payments and extended terms of a student consolidation loan. While there are advantages to consolidating college loans, students should fully analyze and research all of the aspects of this process..College Loan Consolidation – Federal vs PrivateFederal loans are more popular than private loans for a few reasons. Federal loans have lower and fixed interest rates and additional benefits such as grace periods. Private loans are likely to have higher interest rates, and no grace periods.When consolidating, keep the types of loans separate in order to retain the benefits of the Federal loans. Federal loans provide a cap on the interest rate, along with fixed interest rates.College Loan Consolidation – Advantages and DisadvantagesIt is important to consider both the advantages and disadvantages before taking action on a student consolidation loan.Advantages include:
The reduction of monthly re-payment amount
Lower interest rate, which may save you money over time
Organization of loans – make only one monthly payment
Disadvantages include:
Possibly paying more money over the life of the loan
Most likely paying on the loan for a longer amount of time – 10 to 30 years
There are few options to consolidate this loan later
If you decide that college student loan consolidation is for you, start by conducting comprehensive research.Begin with federal student loan consolidation programs such as Federal Family Education Loan Program and Direct Loan Consolidation.They offer fixed interest rates capped at 8.50%. There are also other free resources to help you make a decision. It is important to shop around and gather as much information as possible in order to make the best decision.For private student loan consolidation, inquire with various lenders both offline and online. Many times, online vendors provide a lower interest rate and quick approval times.Perform exhaustive research until you are completely comfortable making a decision, as this decision will make quite an impact on your financial future for years to come.