Tips For Consolidating Your Student Loans

As a student, you have access to two main types of student loans.  Firstly, there are federal student loans, which are given by the government.  Secondly, there are private loans. It's generally easier to consolidate federal student loans, simply because the rates are lower and they're backed by the government, which reduces the risk for the consolidator.

Consolidating your student loans can make life much easier and simpler.  When you're fresh out of college and in your first job, it can be tough to find the money you need each month for all your regular bills, let alone student loan repayments as well.  By consolidating, you can usually negotiate a better rate, or a longer repayment term.  Both of these mean that your monthly repayment will be lower, and you only have to remember to make one payment each month.  But be careful - extending the loan period means that you will pay more interest over the life of the loan. 

One way of finding a good student loan consolidation company is to ask your college.  Often the school you attended has dealt with many different companies, and so can recommend one or two they have found offer good loans and great customer service.  Or, try talking to a local government branch, if you have federal students loans, and they should be able to recommend a debt consolidation specialist.

If you have a mix of federal and private student loans, then you might find it difficult to consolidate both into the one loan.  In that situation, you will generally need to have two consolidation loans - one for your federal student loans, one for your private student loans.  This is because federal loans usually have a much lower interest rate, and if you mix it in with the higher rate personal loans, you might end up paying more than you need to.

You also need to check that you qualify for consolidation if you have federal student loans.  You will need to have completed school, be up to date with your payments, and you have to have a minimum of $10,000 in federal student loans.  If you don't meet all of these requirements, you won't be consolidation your federal student loans.  Private student loans, on the other hand, don't have any restrictions when it comes to consolidation.

In the end, consolidating your student loans can make your financial burden a lot lighter.  However it's important to avoid getting yourself further into debt with lots of other loans and credit cards.  Otherwise you may find yourself getting into a much bigger mess than you're already in.  Learn from your experiences, and realize that although debt can seem good at the time, in the long run it can end up giving you a lot of headaches if you take on more than you can afford.