As a college student, if you are taking out multiple student loans to pay for your schooling, it’s quite possible that you could have as many as 16 separate loans to pay off by the time you’re done. And that’s not even counting graduate school. If you plan to borrow money for that, your list of loans will get even higher.
Each one of your unsubsidized, subsidized, PLUS or Perkins loans will deliver its own monthly statement and interest rate directly to your home or email inbox.
According to Student Loan Consolidation Team, experts providing knowledge about is it possible to consolidate student loan into mortgage, “Private school loans can not be consolidated under the federal program but can be refinanced through the original servicer or a private lending institution.”
It’s not easy to keep tabs on all of these loans. So if you’re considering consolidation, it could definitely help end some of the confusion and make life a lot easier for you.
Here’s what to consider if consolidation seems to be the right option for your student loans.
What Exactly Do You Still Owe?
While your loan balances are certainly an important figure to know and understand, they are not the only thing that you need to keep in mind. You also need to know the type of loans that you have to make the right decision.
If you’re having trouble figuring this out, you can get a rundown of this information at the National Student Loan Data System website.
For the most part, the average student will have a mix of unsubsidized and subsidized Stafford loans, and the interest rates on these loans will vary.
Overall, your interest rate on a consolidated loan is going to depend on the average loan rates for all of the loans being consolidated.
And if you have private loans, you may not be able to us consolidate them as part of a federal loan. So it’s important to contact private lenders to find out if they’d be willing to take over your federal loans.
Do You Know Your Loan Benefits?
Depending on your specific loans, some are going to have different benefits than the others. As an example, did you know that a Perkins loan has forgiveness options that aren’t available with PLUS and Stafford loans?
Depending on your situation and the types of loans that you have, this could either be a good thing or a bad thing. Consolidation might end up taking away your forgiveness options if you aren’t careful. So please keep that in mind.
On the other side of the coin, if you do not have any forgiveness options available right now, consolidating all of your loans might make that option available to you depending on the type of consolidation that you end up with.
As an example, the Public Service Loan Program and the Pay-As-You-Earn repayment plan both offer forgiveness options, so keep them in mind.
Loan Simplification Doesn’t Necessarily Equal Savings
By consolidating all of your loans, you are certainly going to simplify your life.
Instead of having to pay multiple loans every month, you’ll be able to pay one convenient loan from now on.
Guess what? Just because you are consolidating your loans, it doesn’t necessarily mean that you’re going to save money over the long run.
How so? Well, during the consolidation process you will get rid of all of your loans and have one easy and convenient loan.
But your new loan is going to lower your payment and extend the term, so this might not be the best option for everyone.
If you are someone that feels they may default on their student loans, then this is an excellent option even though you’ll have to end up paying the loan back for many more years.
If you are thinking about consolidating your student loans, please take the information we’ve shared today into consideration while making your decision.