When is the Best Time to Consolidate My Student Loans?

Consolidating can be a huge relief, but when is the best time to consolidate your student loansLet’s say you went to college and had to take out multiple student loans. Now that you’ve graduated, it’s time to repay all those loans. It can get overwhelming quickly. Luckily, there’s consolidation. Student loan consolidation can be a huge relief to students juggling multiple loans. This process combines the loans into one simple monthly payment. That means you don’t have to keep track of multiple deadlines and terms. Once you ask yourself, ” should I consolidate my student loans,” you’ve got another question to ask yourself: when is the best time to consolidate?

During Your Student Loan Grace Period

After graduation, most student loans give you a 6 month student loan grace period before you have to start repaying your loan (with interest), especially federal student loans. These 6 months are crucial for a number of reasons. Use the grace period to get a feel about your loans, what the terms are, what the repayment plans are, and to put together a game plan. However, when it comes to consolidation, this window offers you lower interest rates (technically, they still count as in-school). Just make sure you start the application / review process with plenty of time for the paper work to come through before your grace period ends. And keep in mind, when you consolidate—the grace period is over, regardless of how many months / weeks you had left.

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If You’ve Already Started Repaying

If your grace period is already over and done with, and you’ve already started repaying your loans—consolidate now! Not only does consolidation offer easier logistics, in that you don’t have to keep track of multiple repayment dates, but you can also potentially score a lower interest rate as well! Bonus. Check out our article on how to consolidate a loan.

Keep in mind that consolidating your loans means essentially getting a new contract and interest rate. While this can be a good thing, take into account any benefits that you’re getting from your current, original loans. Many federal student loans come with a lot of benefits that private loans don’t, so make sure you know exactly what you’re losing and gaining.

When NOT to Consolidate

If you’re eligible for Public Student Loan Forgiveness, then consolidating is not a great idea. Consolidating federal loans will eliminate the benefits you earn from them, which means the loan will no longer be eligible for forgiveness if you work in a public service field. Try to get your loans forgiven first. However, it does take a while to have your loans forgiven. Additionally, just because you meet the requirements doesn’t mean you’ll be approved. Of course, it’s still worth trying and seeing what happens before you decide to consolidate.

Additionally, if you’re close to paying off any or all the loans, it doesn’t make much sense to consolidate at the finish line. You may not earn a smaller interest rate, and it may not be worth the time spent consolidating.

Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!

 

Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.88% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
VISIT EARNEST
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
VISIT LENDKEY
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
VISIT CREDIBLE
Laurel road company logo.
Variable APR: 1.64% - 5.65%*
Fixed APR: 2.25% - 5.75%*
Undergraduate and Graduate
VISIT LAUREL ROAD
Commonbond company logo.
Variable APR: 1.96% - 7.02%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
VISIT COMMONBOND
Fixed APR: 2.44% - 5.97%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 5.33%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.84%*
Fixed APR: 2.99% - 4.94%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS
VISIT ELFi

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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