Loan consolidation allows you to combine multiple loans into a single, more manageable loan. This simplifies your financial life by reducing the number of monthly payments and making it easier to keep track of your debt.
If you extend the loan term when consolidating, your monthly payments can decrease. This can provide relief if you're struggling with high monthly payments.
Federal loan consolidation typically offers a fixed interest rate, which can protect you from rising interest rates over time. Private loan consolidation may also offer fixed rates, providing stability to your payments.
Federal loan consolidation often allows you to choose from various repayment plans, such as income-driven repayment options, which can make your payments more affordable based on your income.
By consolidating your loans, you can improve your credit score. This is because you're essentially paying off multiple loans and opening a new, consolidated one, which can positively impact your credit history.
Federal loan consolidation may offer options for forbearance or deferment, allowing you to temporarily postpone payments if you experience financial hardship or other qualifying situations.
If you have federal student loans and are pursuing Public Service Loan Forgiveness (PSLF) or other forgiveness programs, consolidating your loans can make them eligible for forgiveness. Private loans are not eligible for federal forgiveness programs.
If you have private student loans, consolidating them may allow you to release a cosigner from their obligations. This is beneficial for both you and your cosigner.
Having a single monthly payment simplifies budgeting and financial planning, making it easier to track and manage your expenses.