Why Consolidate Federal Student Loans

The benefits of looking into federal loan consolidation rates are innumerable. We've listed seven reasons why you should consider consolidating your federal loans below.

1. One lender and a single monthly payment. Federal loan consolidation can help you better manage your education debt by bundling all of your loans into one bill every month. Your only remaining lender will be the institution that issued your consolidation loan. In this way, you will have just one lender and one payment to worry about instead of several.
2. Federal consolidation is free. Visitors looking for federal loan consolidation rates usually do not realize that the consolidation of federal loans is free. Of course, you will still have to pay interest on the loan, but there are no fees or charges for the actual consolidation process. With some types of consolidation loans, you may also have no cap on the maximum loan amount.
3. Many repayment plans. Usually, federal loan consolidation loans have four types of repayment plans that offer tremendous flexibility. These plans usually include standard, graduated, extended, and income-contingent repayment. Most repayment plans have a maximum pay-back period of 25-30 years.
4. More affordable monthly student loan payments. Depending on the federal loan consolidation rates you find, consolidating could lower your monthly payments. In other words, the minimum payment on your consolidation loan might be more affordable than the combined minimum payments of your existing education loans. Remember that your monthly payment will also depend on the length of the term of your loan.
5. Several deferment options. Some borrowers who consolidate their federal loans could qualify for deferment benefits similar to what they had prior to consolidating. Even if a borrower has used all of his/her deferment options on current student loans, taking out a consolidation loan may renew those deferment benefits.
6. Keep your subsidy benefits. A federal consolidation loan usually has two parts: subsidized and unsubsidized. If you consolidate your existing loans into the subsidized portion of your new loan, you can preserve your subsidy benefits.
7. Pay your education loans off sooner. With better federal loan consolidation rates, you could potentially pay your education debt off sooner than you otherwise could. Once you improve your interest rates, more of your monthly payment will go toward paying down the principal of the loan, which means you will make more progress in less time.

Still not sure if consolidation is right for you? Get answers to the most frequently asked questions.