Loan Consolidation

If you have borrowed multiple student loans, you may be eligible to consolidate them into a single loan. We recommend that you begin at the government  Loan Consolidation website.  Another good site as you begin to consider this topic:  Why Consolidate?

If you choose consolidation, the lender of your choice will pay off your existing loans and create a new loan. The interest rate on this new consolidated loan will be the weighted average of your loans (at the time that you consolidate) capped at 8.25%. While the monthly payments normally will be lower, the total actual cost of the loan may be higher due to greater interest charges caused by extending the repayment period by 10 to 20 years.  Stafford loans taken out in the 2006-2007 or 2007-2008 academic years have a fixed interest rate.  There is no benefit at this time to consolidating a fixed rate Stafford taken in those years.  However, if you have borrowed a Stafford or PLUS before July 2006 you have a variable rate loan on those, so  consolidation after July 2008 (but within your grace period) might be a good idea to consider.

Make sure you ask your lender to give you the final cost of your loans before AND after consolidation. Also don't forget to ask about the option of retaining some of your federal loan benefits, such as deferment and loan forgiveness/cancellation, etc. Details about some of these benefits can be found on the government pages on Deferment and Cancellation.