Consolidating Your Government College Loans – Pros and Cons

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Consolidating your government college loans can be both an advantage and a disadvantage. Are you thinking of combining your loan debts for a better repayment process?The fact that you’re trying to look for the best way to pay off your debt is a good thing. However you have to make sure that your decision is the right one for your current situation because this also has a huge impact to your future.What are the benefits of consolidating your government college loans?1. Your federal interest rate is lowered2. You can extend your repayment term3. You can choose from different repayment plans including Standard, Extended and Graduated plans4. You get to pay only one loan every month5. You don’t have to pay a fee when consolidating federal loans6. No credit checks and pre-payment fees7. It is much simpler to apply for federal consolidation than private bank consolidationWhat are the disadvantages of consolidating your government college loans?1. Consolidation will void special borrowers’ benefits if you have a Perkins Loan.2. Consolidating your debts will void the six month grace period. You will be required to repay immediately.3. If you have accumulated a large amount of loan debts, you may end up paying thousands of dollars more than the original amount of your loans. This is because of the extended repayment period. The longer you repay your debts, the more you pay in terms of interest.4. If you have paid most of your loan already, there is no sense in consolidating your debts. You are better off paying your debts the same way you’re doing it.