Consolidating student loans pros and cons

As with any consolidation loan, the net effect of your new student loan may be that you end up paying more in interest (or even more in principal) when all is said and done.This is especially true when you are extending the repayment length on the debt.Debt consolidation is primarily designed for unsecured debt (i.e. When you consolidate your debt, you take out a loan to pay off several other debts.This allows you to consolidate the money you owe into one payment.It offers both conventional and government-program loans, and its agents work with you to get the best loan possible.

However, loan consolidation is not always the answer.

Loans that can be consolidated include direct subsidized and unsubsidized loans, subsidized and unsubsidized Stafford loans, direct PLUS loans, SLS loans, Federal Perkins loans and Health Education Assistance loans, among others.

Private education loans are not eligible for consolidation.

You are likely to lose any grace periods that your loans currently enjoy after a loan consolidation, meaning that you have to begin making payments immediately.

Sometimes a new lender delays your payments to compensate for this, but not always.

You can extend repayment or graduate your repayments, for example.

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