A student consolidation loan is a loan program that combines the payments of more than one student loan into just one payment per month. Student loan consolidation not only makes it easier for the student or his parent to repay the loan/s, but consolidating ones loans can even lower the monthly payments. The downside of this loan program is that, although it lowers ones monthly payments, it will lengthen the overall term of the loan. This means that it will also increase the total cost of paying off the loan. These programs can extend the term of a loan for up to as much as 30 years. However, the interest rates on these types of loans will be almost double that of unconsolidated loans.

Many federal student loans are eligible for consolidation. However, private education loans are not eligible. PLUS loans made to the parent/s of the student cannot be consolidated by the student as they cannot be transferred into the student’s name. However, if the parent is the one who is consolidating the loans, he may add the PLUS loan/s. To qualify, one must have one or more direct student loans in satisfactory standing. If one already has a consolidation loan, he cannot consolidate again unless he adds another direct student loan. One will need to agree to repay the student consolidation loan either by the Income Based Repayment Plan or the Income Contingent Repayment plan. The loan provider will explain these plans.

There are no fees to apply for a student consolidation loan. One can apply on line by going to www.loanconsolidation.ed.gov. At the site, one can then choose to apply directly on the site or to download a paper copy of the application. One can also call 1-800-557-7392 and request an application.

The first payment of a student consolidation loan will be due within 60 days of the loans approval. Depending on the total amount to be consolidated and the payment plan that the person selected the loan’s term will range anywhere from 10 to 30 years. A temporary deferment may be granted to a borrower of a consolidation load if he has had trouble making his payments. This deferment will temporarily stop or lower the monthly payments of the loan. Consolidation loans that include PLUS loans must use the Income Contingent Repayment Plan rather than the Income-Based Repayment Plan.

In conclusion, there are many things one should think about when deciding on student loan consolidation. Once a person consolidates his loans into one loan, they cannot be separated. Because of this, one should thoroughly examine all of these pros and cons before committing to a consolidation loan.