To a college grad swamped with multiple student loans that have come due, loan consolidation is an enticing option.When you consolidate, a lending institution pays off your existing balances and replaces them with a new, consolidated loan.The key terms for federal consolidation loans do not vary by lender: no application or origination fees are allowed and there are no prepayment penalties.
Yet despite the appeal -- and its popularity -- student loan consolidation isn't for everyone.
Here are some frequently asked questions and answers that may help determine if it's the right move for you.
Consolidation is an advantage for practically all students presently in school because the low rate that you will be locked into can save more money than the worth of the grace period that is lost.
The 2 percent reduction in the interest rate can save about 1100 dollars on a 10000 dollar loan.
Today, graduates are leaving campus holding a diploma in one hand and an average of $17,000 in debt in the other.
In America, student debt is the second largest form of consumer debt.
Private consolidation lenders, on the other hand, are not subject to those terms and may include variable rates and any number of fees.
What's more, some benefits of a federal consolidation loan, such as interest subsidies on deferred loans, are not available on private loans.
Consolidating student loans is rolling all of your loans into one loan.