A lot of students finish college with multiple student loans. It’s the worst possible way to start a new chapter in your life. Fortunately, there’s a solution to this problem. By consolidating your student loans, you will be able to extend your repayment terms, pay a lower average interest rate and reduce your overall monthly payments. It sounds great, but you still need to be careful when you do it. Just like all money-saving solutions, loan consolidation also comes with both pros and cons.
The benefits of consolidating your student loans
Consolidating your student loans comes with a lot of benefits. First of all, you replace multiple loans with a single loan, which you can manage easily. This way, you won’t have to worry about forgetting to make a payment.
Additionally, you can also get a loan with a lower interest rate than the average rate that you were paying for the other loans. And it’s even better if you are able to turn variable rate loans into a fixed, low-interest rate loan.
The costs of consolidating your student loans
Unfortunately, by consolidating your student loans you will lose any grace period that you currently enjoy. This means that you have to make payments immediately. And, if you extend the repayment length on the debt, you could also end up paying more interest when all is said and done.
It’s important to also note that you can only consolidate student loan debt once. If you do it today, but something better pops up some months from now, there’s nothing you can do.