Advantages and Disadvantages of Governmental Student Loan Consolidation


When you decide to consolidate your governmental student loans, you have to take a notice of the advantages, but also of the disadvantages. Are you deciding to consolidate your loans, to make your monthly repayment process easier?First of all, it is nice to hear that you are trying to find the best way for yourself to repay your debts. However, you must ensure that your decision is right for your situation, because it will have a significant impact on your future.Here is a list of the benefits of a governmental student loan consolidation:1. It reduces your federal interest rate
2. Your repayment term can be extended
3. It has different payment plans: Standard, Advanced or Graduate
4. Instead of several loans, you will only repay a single loan
5. There is no fee to pay with a federal loan consolidation
6. There wouldn’t be a credit check or prepaid fees
7. It is easier to apply for federal consolidation than a private consolidationDisadvantages of a governmental loan consolidation:1. It will make special borrowers benefits invalid, if you have a Perkins loan.
2. It will make the six months grace period invalid. This means that you need to pay immediately.
3. If you have collected a large amount of debts, its possible that you end up repaying thousands of dollars more than the original amount of the loan, this is the consequence for the extended repayment term. The longer you are repaying, the more you have to pay.
4. If you have already repaid more than a half of your loans, it would be more smart not to consolidate your loans, you will save more money in the end.