Student loan debt is often unavoidable for many college students as the cost of attending a university is increasing. For many, scholarships and grants may not meet all of the financial needs of today’s college student, so it’s for this reason many students leave college with some form of student loan debt.
After college, graduates with student loan debt will sometimes turn to a low interest student loan consolidation in order to better manage their college debt. Pooling all of your student loans into one area can make them easier to handle and will lower the risk of missing a student loan payment or allowing multiple student loan payments to become overwhelming.
However, there are many instances where student loan consolidation may not be the best route in dealing with student loan debt. Students with various forms of loans, like private loans and federal loans or subsidized and unsubsidized loans, will not be able to consolidate these types of loans and would therefore not benefit from a student loan consolidation.
Also, students with a small amount of debt or very few student loans may be better off paying them separately. Consolidating student loans, even at a low interest rate, can cost more over the repayment lifetime of debt consolidation loan due to the large amount of principal on which interest can accrue.
College graduates who may be considering a low interest student loan consolidation may want to sit down and figure out how much it would cost them to repay their student loans separately versus using a student loan consolidation. When interest is factored in, college graduates may find that paying on their debt separately will be more financially beneficial than a student loan consolidation