Student Loan Consolidation Is Not For Everyone
Although in general, most people who have just completed college and are beginning to pay off their student loan debt will benefit if they consolidate student loans, not everyone gets better student loan consolidation rates than they had on their original loans.
Most will find that they save money and hassle if they do go ahead with student loan consolidation, but there are those who are in a situation where this is not the case.
If your credit is not so good, if you’ve recently declared bankruptcy, or if other life factors might hurt you when you attempt consolidating student loans, it’s best to talk to your financial adviser closely before making any decisions. If your credit history was better when you were taking out the student loans than it is now, you can expect that you won’t get the lowest student loan consolidation rate and you might lose out.
If most of your loans are Perkins loans at low interest, you may be able to keep those rather than consolidating student loans into one loan. In that case, the low rate you’re paying now might be better than the new rate you’d get when you consolidate.
For most graduates, of course, student loan consolidation rates will not only lower their debt load, but will help cement a better credit score as your many loans and debts are combined into one in a student loan consolidation. This can be a boon if you’re hoping to enter the work force with a solid credit history, maybe purchase a home or a car, etc.