How to Consolidate Student Loans

Student loan consolidation combines an assortment of loans, producing one immense, much more convenient loan. This usually makes payments lower and easier to manage. Additionally, if a borrower has an impressive credit score, his or her interest rates might be lowered.


Those who would like to consolidate their student loans need to verify their eligibility. Student loans can typically be merged if three requirements are met. First off, the borrower must be enrolled in school less than half-time. Next, he or she must already be making payments or consolidate during the grace period. Lastly, depending on the lender, the borrower must have a minimum loan balance of five to ten thousand dollars.

Federal and Private

So long as borrowers are eligible, their federal student loans and private student loans can both be consolidated. However, it’s important to note that they should never be consolidated together. Federal student loans offer more benefits than private ones, including tax deductible interest and the choice to defer payments while going back to school. If both kinds are consolidated together, the extra federal loan benefits will be lost.

Special Options

When choosing a lender, borrowers should explore the special options that each one has to offer. Certain loans can be forgiven by service (i.e., assigned full-time practice in an eligible profession) or higher education, but the penalties for failing to meet either of these requirements can be severe. Borrowers should be sure to read every bit of fine print and only make well-informed decisions.


Once the ideal lender has been chosen, the process of consolidation may take anywhere from five to forty-five days. Secured student loans will require that valuable personal assets be used as collateral. Unsecured loans have much less extreme requirements. Either way, the endorsement of a co-signer will be critical for those who are only consolidating undergraduate student loans. Co-signers beware: student loans cannot be expunged, even in a case of bankruptcy.

Debt Free

One of the fastest ways to pay off any loan is to make extra contributions to its principal. Making extra payments will save borrowers a great deal on interest over time. Low scheduled payments will also keep interest lower on future loans. If student loan payments are higher than eight percent of a borrower’s income, they will damage credit, and bad credit fosters higher interest rates. Being quick to pay off student loans is nearly as prudent as getting them consolidated in the first place.