Making Loans More Manageable

Consolidating student loans involves having your individual loans paid off by a lending institution, then paying back a single loan at a fixed interest rate.

The benefit of consolidating loans is to reduce monthly payments to an affordable level. Payments can sometimes be reduced by as much as 50 percent. In addition, it allows you to lock in a fixed interest rate, which can be lower than variable interest rates.

Consolidating loans can result in an extended repayment term. So while you will have lower monthly payments, the loan will take longer to pay off. Because of this, you could wind up with higher interest payments over time.

Ultimately, consolidating student loans can be a way to better manage loan repayment and make the loan more affordable in the short term. But once you consolidate your loan, you are locked in for the duration of the repayment schedule. Therefore, make sure it is in your best financial interest to do this before proceeding.

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