What You Need to Know Before Consolidating Student Loans

If you can’t keep up with your multiple college loan debts, consolidating student loans might be the best solution to your problem. But before you go for this option, it is wise for you to know not only the good things about debt consolidation. You must take time to know the bad points as well.As with any other decisions you make, knowing the pros and cons of the solution you choose will prepare you for any consequences and prevent you from regretting your actions later. What are the things you have to know about consolidating student loans?Let’s start with the good things first:- Your monthly payment dues are reduced and your payment term extended- You only get to pay a single loan every month so you don’t have to worry about paying off multiple lenders- You get to lock in on a lower interest rate that is fixed for the rest of your loan’s tenure- No credit checks, no bank fees, no prepayment penalties- You can consolidate your debts with those of your spouse’s or partner’s for lower and more affordable repayment process- You can choose which loans to consolidate together and which ones to leave outWhat are the bad points of consolidating student loans?- You will end up paying more than your loan’s overall cost because of the extended payment term- If you choose to consolidate your federal debts with private debts, you will lose helpful incentives like forbearance and cancellation options or loan forgiveness- New loans can’t be consolidated with older ones- Debt consolidation voids the grace period: this is if you consolidate within the grace period – you will be required immediately- Since your interest rate is fixed, it cannot be adjusted in case prevailing rates go lower