Private And Federal Student Loan Consolidation—Can It Help You Get Out Of Debt?

Many college graduates leave school with multiple student loans that are often from more than one lender, which leads many to look into student loan consolidation.  However if you have both private and federal student loans to consolidate you are not likely going to be able to consolidate them together into one lump sum, so does it benefit you to consolidate?

Most college graduates are looking to consolidate their student loans so they can have one low interest rate on their debt.  This can be beneficial and may actually help you get out of debt fast due to having just one interest rate rather than multiple rates on various loans.

However, if you have both private and federal loans that will not consolidate together you are going to need to do some math or talk with a counselor about consolidating.  You need to figure out what the length of the repayment plan is on your loans separately and factor in how much you will pay over that time on each loan with interest.  Then figure out the same information if you were to consolidate into one big sum, or one sum of private and one sum of federal loans.

The length of repayment and interest is going to be what you want to look out for.  Some consolidations will last for 30 years with their repayment schedule, so you will either want to pay more than the minimal monthly balance each month or look at other options to get out of debt faster.

If you take the time and figure out the costs of keeping your student debt separate versus consolidating, it is going to be valuable information in helping you make a decision, pay back your loans in the best way, and help you rid yourself of student debt in a more timely manner.