Student Loan Consolidation: Why You Should Rethink Consolidating Your Student Loans

When considering the possibility of consolidating student loans it is best to imagine this hypothetical scenario.  Address one small problem at a time, then move on to the next, then wash, rinse and repeat. The same can be said for consolidating student loans.

Why is it not smart to consolidate your student loans?

The term consolidate means to combine a number of things into a single or more coherent whole. when you consolidate student loans you are losing flexibility when paying off your student loans.

The consolidation of student loans loses loan flexibility.

By consolidating your loans you might save some interest upfront, but you will in most cases, lose in the long run.

Loss of Federal Student Loan Perks

Taking a federally funded student loan that is serviced by approved federal vendors is risky in the sense that you will lose many of the federal perks.

When does it make sense to consolidate student loans?

In my opinion, consolidating student loans only makes sense when the implications do not negatively impact your cash flow and if you can lock in at a lower interest rate.

Final Take: Should you consolidate your student loans?

After reading this and analyzing the pros and cons of each side, the choice is ultimately yours if you are considering consolidating student loans.

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