College students can take out new loans each year they're in school, so by the time graduation comes, it's common to have half a dozen, or more, individual loans.
Each of them may have different terms, including interest rates.
Most of them could streamline the repayment process by consolidating their student loans. Get Financial Help Now It simplifies repayment and could save you money.
This can be attractive to borrowers because the consolidation frequently results in longer repayment periods and lower monthly payments.
When it comes to consolidation, the types of loans you have matters, but most federal loans, including Stafford, Perkins, Direct Plus and Supplemental loans, can be consolidated with other federal student loans."The interest rate on (federal) consolidation loans is an average of the interest rates on the (federal) loans you're consolidating," says Ken O'Connor, director of student advocacy for Fynanz, a New York City firm providing technology for the private student loan market.
By combining your interest rates, you also lose the ability to employ a favorite tactic of financial planners for paying down debt: targeting the most expensive debt, the loan with the highest interest rate, first.
What's more, consolidation typically results in the borrower paying more in total interest because consolidated loans are generally stretched out over a longer period, says Jessica Ferastoaru, a student loan counselor with Take Charge America.2.