Student Loan Consolidation Center Information

Whether you have recently completed your degree or are nearing completion, chances are you have a wide-range of student loans to manage.  And, believe it or not, lenders generally require that monthly payments on those loan amounts begin almost immediately after graduation.

Wouldn’t it be nice to make one monthly payment that covers all your loans?  That’s where a student loan consolidation center can come in handy.

What does it mean to consolidate your student loans?

Basically, through a student loan consolidation center, you can have all your various federal loans, including Stafford, Perkins and other loans merged in to one account. 

This approach offers tremendous advantages in terms of both ease of payment as well as lower interest rates.  Many student loan consolidation centers also offer programs to restructure your private loans as well.

What are the advantages to consolidating student loans?

There are a variety of reasons to consolidate your student loans, including:

• Reduced Payments:  This is the number one reason to consolidate your loans.  In some cases, you can reduce your payments by as much as 50%.
• Reduced Long Term Interest Rates:  In addition, merging your student loans in to one package may reduce your interest rates.  This is especially true if you have a mix of very low rate loans (such as the Stafford loan) and high rate loans, such as the Parent Plus loans. 
• Ease of payment:  Instead of writing multiple checks or making multiple online payments, a student loan consolidation center can help you create one payment schedule, which will help ensure that you do not miss payments due to confusion over which payments have been made.

What are the downsides / What should I consider?

Student loan consolidation sounds like a great deal, but there are some important factors to consider before you just “leap in:”

• Longer Term Loans:  The reason why monthly payments can be reduced so dramatically is because, in many cases, the consolidation loan extends the term of your loan.  That might be useful for the short term, when you’re low on cash, but do you really want to be paying off your student loans 30 years after you’ve graduated?  Think carefully about how long you want your loan term to be and be sure there are no prepayment penalties if you decide to pay off your loans early.
• Private Loans:  If, in addition to or instead of federal loans you have a range of private loans, think carefully about how you consolidate these.  If you merge your private and federal loans, you will lose all the benefits associated with your federal loans, including interest rate protections and deferral procedures.
• Grace Period: For students who took out student loans before July 1, 2006, you have a limited period of time in which to get your loans consolidated.  Check with your preferred student loan consolidation center for more details.

How Do I Get Started?

There are a variety of different student loan consolidation centers.  Check out services like Student Loan Consolidator.com and the Consolidation Center for more details.