Contrary to popular belief, it is against Federal regulations for lenders to instill pre-payment penalties on your student loans. Consolidate student loans in order to reduce your monthly payments by lowering your interest rate. If you want to pay a little extra each month, it will go toward the balance which will help you pay off your loan sooner. Depending on the amount of money that you owe, you could shave a few years by just paying an extra hundred dollars a month! When you consolidate student loans, ask your lender about their pre-payment policy. If they mention any type of fee for pre-payment, then you should find another lender.

While you may be comfortable paying your monthly payment for now, eventually you may be in a position where you will earn more money and will want to pay off your student loans sooner. Consolidate student loans to lock into a lower monthly payment and then decide if you want to pay extra each month. Having this freedom will allow you to create a budget that suits your needs and allows you to adjust your monthly payments as you see fit. Remember that you should always make the minimum payments each month, and if you pay extra one month, it will not lower your next month’s payment.