There’s no doubt about the amount of financial terminology and legalese that surrounds student loans. (Luckily we have a few posts that break down terminology and student loan acronyms you’re likely to come across). For now, let’s focus on just one of those terms: “Consolidate.”
What is Student Loan Consolidation?
No doubt you’ve heard the phrase “consolidate your loans” but what does that mean exactly? Not all of us are financial gurus, after all, especially students just starting out. Simply put, consolidating your loans means that you combine multiple loans into one, making for one easy monthly payment instead of separate ones. If you take out multiple loans, consolidation can make repayment a lot easier.
Should You Consolidate Your Student Loan?
Sounds like a great idea, right? There are, of course, pros and cons to any financial decision. For example, consolidating can make repayment easier, and also give you access to different repayment plans that you didn’t have before, but it can also increase the amount of payments you have to make, as well as increase the interest on those payments. Carefully consider your options, weigh the pros and cons, before committing to anything.
It’s a good idea to speak with your loan providers to clarify confusion and ask them any questions you might have. Again, research is important. Being well-informed will allow you to make the best financial decisions possible when it comes to student loans.
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