Should I Consolidate My Loans?

Direct Loan Consolidation may be an answer for you if you’re having trouble making monthly payments on multiple student loans. They work by consolidating (combining together) your loans into one single loan. What are the pros and cons of doing this?

Pros:
Consolidating your loans will lower your monthly payment, providing you with some measure of financial relief. This is done by combining your current loans together into a single loan and stretching the repayment plan over a longer period of time (as much as 30 years).

Cons:
Since you’ll be paying over a longer period of time, your over all interest (the cost to borrow money) will be greater.

These are not all the pros or cons, and you want to be sure you understand the new terms (rules) for your single consolidated loan before you agree to it. For more information check out the Federal Student Aid’s website on loan consolidation: Dept of Education’s website

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