The pros and cons of student consolidation loans

You cannot eliminate student loan debt by filing for chapter 7 bankruptcy. Education loan consolidation is a popular way of ensuring that the repayments remain easy to manage and stay affordable until the debt is completely cleared. Find out the advantages and disadvantages of student consolidation loans.

Advantages of student consolidation loans

Student loan consolidations
Rather than having to send out several checks each month, student loan refinance means that you will only need to make one affordable repayment each month. You will also have a single point of contact for all of your enquiries. Lower monthly debt repayments
You can extend the term of the agreement to reduce the amount of disposable income that goes towards servicing your debts. However, this will mean that you pay more interest over the life of the loan. Repayment stability
The APR is fixed for the duration of the loan so you will know how much money will go towards servicing your debt each month. This makes household budgeting a lot easier to manage. Continued relief from interest
If the government is currently paying the interest, it will continue to do so under a federal consolidation loan. You will lose this benefit if you consolidate this with a private student consolidation loan. Complete flexibility
You can choose to consolidate some or all of your student debt. No credit bureau checks
Unlike other loans, you won't be subjected to credit scoring when you consolidate federal student loan. However, this rule doesn't apply if you borrow money from a bank to consolidate your debts.

Disadvantages of student consolidation loans

Loss of grace period
You will be expected to start your repayment straight away. There will be no six months' grace period. Extending the repayment period
If you increase the repayment term, you will pay far more cumulative interest on the debt. Deferment, forgiveness and forbearance
You'll no longer be eligible for government help if you experience financial difficulties. Consolidating college loans as a couple
If you consolidate your debt as a couple, this can cause problems if your relationship fails. Interest rates fall
You are only able to perform college loan refinancing once. If interest rates become more favorable, you won't be able to take advantage of the lower rate of interest.