Loan Consolidation may be an option if you have multiple lenders, significant loan debt, or different types of student loans. Through consolidation, a lender buys all of your eligible loans and combines them into one new loan. Loan consolidation offers benefits such as one consistent monthly payment, an extended repayment period, and a smaller payment amount each month. However, consolidation also means the loss of all interest-free periods associated with a Federal Perkins loan as well as the loss of cancellation benefits. Also, a longer repayment period means more interest is paid over the life of the loan.
Before you choose consolidation, be sure you understand the benefits and drawbacks.