Consolidating Student Loans: Pros and Cons Associated

May 24, 2019 0 Comment

An average college graduate student is known to leave school with almost $40000 of withstanding debt. However, if a student prefers to switch majors or transfer the college or prefer to go to graduate school once again, chances are that he owes almost 100000 dollars to the creditors. There is a high chance that if you are among the thousands of students who have a student loan, you are not dealing with a single loan only. Every semester you are going to take new loans. Moreover, if you have not been able to cover the costs that are associated with a federal loan, chances are that you are going to turn to the private lenders, like the banks or any other institution that lends money, for funding the other expenses. According to, almost one million people are known to default on the student loans every year.

An important option that will help you to start tackling the debt associated with your student loan is debt consolidation. It is a good idea to explore the student loan consolidation for clearing all the withstanding debt amounts. However, before you are heading down the road of debt consolidation, you have to educate yourself about everything about a student loan debt consolidation.

What is a student loan debt consolidation?

If like most of the college graduates, you also have numerous student loans; chances are that you have already come across the term, student loan debt consolidation. This is a unique process of combining all the student loans into one single big loan. You are not going to owe your original loan amounts anymore because the consolidated student loan is going to be new. It also comes with a new and better rate of interest, an ideal payment policy, along with favorable times as well as conditions.

However, both advantages, as well as drawbacks, are associated with consolidating the student loans. Choosing student loan debt consolidation is completely your choice and the decision that you are taking is going to depend on the diverse specifics of the loans, like the kinds of loans, balances, interest rates, borrower benefits, as well as the present financial situation that you are in.

It is crucial to understand that the loans are of different types, and most importantly, a huge difference lies between the federal loans as well as the private loans. Each has their own advantages and disadvantages, which you need to be aware of.

Given below are the pros and cons that are associated with a student debt consolidation loan.

Pros of student debt consolidation loan

Given below is a list of the student debt consolidation loan benefits that you need to know about.

  • Simplicity: Consolidating the student loans is going to make it easier to deal with them as you are going to have only one or two payments at the end of the respective months. Moreover, you will have to keep track of only a single or two accounts. If you forget to make the payments and find it difficult to keep track of the diverse student loans, a student debt consolidation loan will be responsible for keeping you organized and assist you to stop missing the payments. If you miss your payments, your credit can be damaged or you may also have to pay additional fees. This is why it is a good idea to consolidate your student loans.

  • Lowers the payments: Consolidation is capable of potentially lowering the complete loan payment at the end of the month with the help of a low rate of interest and a long period of repayment. However, this is completely dependent on the rate of interest as well as the terms associated with the current student loans. This is going to be extremely beneficial if you are struggling to make a payment or you cannot qualify for the income-based plans of repayment.

  • Dodge default: One among the 10 student borrowers has defaulted on the federal loans. If you are already in default, you need to consider a student debt consolidation loan. It can lower the monthly payment on basis of the loans. However, it is crucial that you get the loans into proper shape before you are consolidating them because that is mandatory.

  • Better rates: If you have already graduated and have landed a good job, and you are also making financial choices that are responsible, like keeping the credit card balance low and making proper payments with time, chances are that your credit score has gone up. In this case, you might be eligible for the low rates of interest, which is going to be extremely helpful for you.

You can go through the debt consolidation reviews as well, to get a better understanding.

Cons associated with the student debt consolidation loans

Consider the list of the disadvantages that are associated with the student debt consolidation loans.

  • Losing benefits: On basis of the student loans, there is a high chance that you are going to lose a few of the borrower benefits that the loans are combined. For instance, you can lose the benefit of loan forgiveness, in which the complete or a certain portion of the loan can be considered clear if you meet the conditions of a flexible payment option or a deferment.

  • High rates: Depending on the current rates of interest as well as the loan amount, chances are that you can pay a high interest rate and the total amount is also going to increase. If you are ending up having to pay more on the student loan, it is better that you leave them be.

  • A long period of repayment: There is no denying the fact that a debt consolidation loan can lower the initial payment. However, it is going to increase the total duration of the debt. Also, chances are that you are going to pay more money with time.

  • Being aware of the variable rates: When you are consolidating the private loans with the private lenders, there is a high chance that you are going to be offered with a variable rate of interest. This means that the rate of interest has a chance of increasing with time. Moreover, your payments can be increased dramatically, which is not something that you want.


It completely depends on you if you are interested in consolidating the student loans. However, before you are finalizing your decision, you have to consider the advantages and disadvantages that have been mentioned above.

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