However, that could be worthwhile if you simply can't afford your payment today and don't have a choice.Also, when you consolidate, you'll need to re-apply for any interest rate deduction programs you were on.For an explanation of our Advertising Policy, visit this page.Getting rid of student debt is high on the radars of everyone who has it.)It seems like a roundabout way to go about paying your debt: I mean, you are taking out a new loan to pay off another loan. The reality is that, if you are currently having trouble keeping up with payments or digging yourself out of debt quicker, a debt consolidation loan may be just the solution for you. Student loan consolidation is the process of combining your Federal student loans into one single loan.
If your loan payments are in default, you will be required to make at least 3 consecutive monthly payments before you can apply for the Federal student loan debt consolidation loan.If you're a parent, and you borrow with a PLUS loan to pay for your children's college, you should never consolidate these loans. This is typically a bad idea because PLUS loans don't qualify for income-based repayment programs like IBR, PAYE, or Re PAYE.As such, if you consolidate, you're at a loss of these programs.Your interest rate will be the weighted average of all the loans you consolidated (rounded up to the nearest 1/8 percent), and your payment should also equal the sum of all your individual payments.Because remember, student loan consolidation is about convenience in paying multiple loans – nothing else.For example, if you were saving 0.25% for using Direct Debit, you would need to re-setup that plan to save again.These small factors are what people forget when consolidating their student loans, and it could end up costing them more.Student loan consolidation makes this easier on you by making those 3 different loans into a single loan to make payments on. Although, a debt consolidation loan helps to simplify and streamline your payments, a downside to getting it is that your new lower monthly payments could also lengthen the amount of time you will have to pay off your loans by.Tip: You could easily offset this by paying a little more each month.Here’s an example: If your payments currently come to a total of 0 across multiple accounts and you apply for a debt consolidation loan, that payment could come down to say 0.Now you are paying just one payment of 0 per month (plus any applicable tax) instead of twice the amount like you were paying before.Read all about Spousal Student Loan Consolidation Loans here.To qualify, you must have at least one loan in that is in the grace period of in repayment.This could also mean you won't qualify for student loan forgiveness programs such as PSLF. Consolidating your student loans could end up costing you more over the life of the loan if you forget a couple of things.