Pros and Cons of Federal Student Loan Consolidation

Not sure if you should opt for student loan consolidation?It may help you weigh your options and decide if you know more about the advantages of disadvantages of consolidating your college debts.Do you have a federal college education loan? If you do, then all the more that you have to read further to know if federal debt consolidation is your best bet.First, what does federal debt consolidation mean?Simply put, this means combining all your U.S. government loan into one easy monthly payments.Now what are the pros of federal student loan consolidation?• Lower monthly payments, lower federal interest rate and paying back over an extended period of time
• There are about four different payment plans you can choose from including an extended plan that lets you pay up to 30 years
• You get to pay only one payment a month which is more convenient than juggling two or three or more
• Consolidating federal loans do not require any fee
• No credit check is involved in the process of consolidating debts
• No pre-payment penalties involved
• The application process for this type of loan is so much simpler than othersHow about the disadvantages of student loan consolidation?• The extended payment plan will cause you to pay more interest in the long run. If your loan is really large, then this repayment option can cause you thousands of dollars
• Your consolidated interest rate can be higher than the rates on your other loans which could be disadvantageous to you
• Consolidating within the grace period will require you to pay immediately
• If you have already paid off a large portion of your total debts then there is no sense in wasting money and effort in consolidating your loans
• If you have a Perkins loan, consolidating debts will forfeit your special borrower’s benefits.