Here is what you need to know when you consolidate student loans.

- Consider Your Options

Deciding to consolidate student loans is a possibility when you have student loans to pay off. There are two types of student loans that you may have, federal government student loans and private loans from regular banks and lenders. If you can consolidate each of these categories of loans together, then you can pay a much smaller interest rate all together, paying less interest and less money over time. This is generally also a good way to get a smaller payment on a monthly basis which is going to allow for the payments to be made more easily.

- Consolidate Separately

Most of the time, what you are going to find is that federal loans and private loans should be consolidated separately. Federal loans tend to have a much smaller interest rate in comparison to private lending options. When you can effectively shrink your student loan debt down into a couple of small monthly payments instead of several larger ones, you will be able to manage your money much more easily, affording your lifestyle much more easily as well.

- Put a Plan Into Action

Whatever method you do decide to use when paying your student loan debts off more quickly, just make sure that you make good use of it. The best type of method for student loan repayment is the one that you actually put into action for the best results. You can get yourself out of student loan debt much more easily when you actively seek out solutions for your financial issues.

If you federal loans with variable rates like a variable rate Stafford loan, then you should look into the possibility of consolidation. “Is it better to consolidate my student loans if they’re variable rate loans?” In this case, the answer is very often yes. That’s because by consolidating them you lock in a single rate. Not only does this give you a predictable monthly payment it simply saves you money.

The only drawback to locking in a rate is if it you lock in a rate and then the rate drops. You won’t be able to benefit from that lower interest rate. Instead, you must pay the rate you locked in when you consolidated the loans. But if the interest rate goes up, no matter how high it goes or how much it fluctuates, you’ve locked into one rate and it cannot raise, no matter what the market does.

“Is it better to consolidate my student loans now or wait until the rate drops?” is also a common question. Watch the experts to see what they say about interest rates, and whether they expect them to raise or lower. If they agree that the rate will probably lower mid-year (July 1st) then you may save more money by waiting for the drop before consolidating your student loans.

If you already have a fixed rate loan, then consolidating could still save you money though it more than likely won’t. However, if you look into consolidation and it’s going to lower your interest rate by one point or more, then it’s worth it to consolidating.

Also, it can be very helpful to consolidate simply to combine your loans into one and make one monthly payment instead of several. You can also end up with a lower monthly payment that all of your previous loan monthly payments combined, though you’ll have to pay longer. If you have several variable loans or fixed rate loans and consolidate them at a low locked-in rate, then the clear answer to, “is it better to consolidate my student loans?” is yes.

When you start the journey and decide, “I want to consolidate my childs student loan,” the first thing you should do is make sure that the loans can be consolidated. If it’s a federal education loan, it can be consolidated but there may be certain restrictions in certain cases. If the loan has already been consolidated, you can’t do it again unless you add another loan into the package.

The biggest restriction is that you can’t consolidate your child’s student loans with certain private loans of yours. Each type of loan may have specific restrictions in this area. For instance, you can’t consolidate your own PLUS loans with a Stafford loan given to your child, and you can’t consolidate any non-federal loan with a Stafford or other federal loan.

When you decide, “I’m ready to consolidate my childs student loan,” you also want to examine your reasons for consolidation. You can extend the plan over a longer period of time, which means you have the debt burden longer but your monthly payments are reduced. The standard consolidation repayment is a 10-year plan, but most can be extended as far as 30 years if necessary.

If the balance of the loan is less than $5,000, you may not be able to find a lender willing to consolidate, and some only handle loans with balances over $7,500. But any lender can help you consolidate these loans. There are no special banks or agencies you need to do this. And you should never pay anyone to do this for you—they make their money from the interest you pay on the loan.

When you contact a lender, pay attention to the interest rate you’re given. The advantage is that your rate is locked in so that if interest rates rise while you’re repaying the loan, you still pay the original rate. The opposite also holds true. If rates lower, you still must pay the higher rate you agreed to when you decided it was a good decision, “to consolidate my childs student loan” to save money and make it more manageable.

You should know when you’re wondering how to consolidate federal student loans that any lender can provide this service to you. You don’t need to go through any special agency or company in order to qualify for federal loan consolidation, and you certainly don’t need to pay an outside company a fee in order to be able to consolidate. You can deal directly with the lender. They’ll make their money through the interest that you pay them while you’re repaying the loan.

Also, especially if you use a company you’re not familiar with you should never agree to have federal loans and private loans consolidated together. In many cases this isn’t even possible, but when it is you’ll lose all the money-saving benefits of the federal loans. If you need private education loan consolidation, you should combine those loans separately into one loan, and have another for federal loans. Bear in mind that two loans are better than several, and you’ll get a much better interest rate on the federal consolidation making it well worth your while to keep them separate.

How to consolidate federal student loans is something that’s easy to do, and has many benefits. You’ll end up with one loan payment instead of two or more, and you’re monthly payment will probably be smaller. In fact, if you decided to consolidate because you’re having a hard time making your monthly payments, then you should be aware that there are other options besides the 10-year repayment plan that comes standard with the consolidation.

You will pay more in interest charges over the course of the loan than you would with a 10-year plan if you choose a longer time period to repay the loan. If you want the smallest monthly payment, you may be able to stretch the loan out for up to 30 years, and simply pay more against the principle when you can to pay it off more quickly and save on interest.

How to consolidate federal student loans is an easy process because so many people do it to help make their loans more manageable and to lock in a lower interest rate for the course of the loan.

However, if you have both private and federal student loans you can’t combine them into one consolidation. Federal loans qualify you for special low interest rates when you consolidate, and private loans don’t get that benefit and are instead based on your credit score like any other loan or consolidation.

When you wonder, “How do I consolidate my student loans?” you might think you need to contact some agency you see online or on television for help in doing so. But you don’t need to pay any company a fee for help consolidating your loans. Any lender can handle this for you so you should contact a lender directly.

Unless you specify a certain time period when do ask your lender, “How do I consolidate my student loans?” they’ll give you the standard 10-year repayment plan. But you can have the loan repayment schedule extended up to 30 years if you want. This will of course cost you a great deal more in interest over that time period, but will lower your monthly payment. If it’s necessary to get the lowest payment possible, you may wish for this type of extension. Then if you can you can pay extra to help save money on interest.

When you pay extra on this type of loan you should let your lender know that you’re paying the extra toward principle, so that it can help you pay off the loan faster and save interest. For those who simply want to lock in a lower rate and save money on interest without extending it beyond 10 years, then the same guidelines applies when making extra payments.

The benefit of getting a lower, locked-in interest rate is the reason most people ask, “How do I consolidate my student loans?” If the interest rate rises while you’re in repayment, you still get the lower rate you agreed upon during consolidation, which can save you thousands of dollars over time.

When you find the lender who will help you when you ask, “how can I consolidate private student loans?” then be aware that you don’t get the same benefits as when you’re consolidating federal student loans. In fact, if you have both types of loans you’ll have to consolidate them privately. While you can technically consolidate a federal loan with private loans, you lose all the benefits of the federal loan and pay higher interest. There’s no reason, in that case, not to consolidate the loans separately.

Consolidating your private student loans is something you should definitely consider if having multiple monthly payments is causing problems. The biggest benefit, in fact, when you ask, “how can I consolidate private student loans?” is simply the ability to combine several loans into one and make one payment instead of several. You can also have a lower monthly payment thanks to the consolidation extending the loan for more years than your original plan.

A private student loan consolidation is much like any other loan consolidation. If you get a home equity loan to pay off credit card bills and other debts for instance, you’re facing the same general type of loan as this consolidation. You don’t qualify for the low interest that comes with federal loans. Instead, the interest rate you get is based solely on your credit score.

If your credit score has improved since you first took out the student loans, this can show you a big improvement in your interest rate. If you can get it locked in then you can really save money over time and not have to worry about fluctuations in the rate. Of course, if the rate drops you’re still locked into the higher rate. The peace of mind of knowing exactly what you must pay can be well worth that risk.

When you wonder, “how can I consolidate private student loans?” be aware that a smaller monthly payment is convenient, but the longer the loan agreement the more you end up paying in interest in the long run.

By defaulting on the loan, you will not only take a serious drop in your credit score, but you can be sued, have your wages garnished, or end up forfeiting any state or federal income tax refunds as those can be taken automatically by the government and put toward your loan balance. The extra costs can rack up very quickly, too. You could end up having to pay an extra cost that amounts to up to 25% of the loan balance, which can be substantial if you have a lot left on your loan. And it won’t go away. Collection efforts will go on for at least 25 years in the case of a federal student loan.

There are ways to rehabilitate the loan by making payments on time and making a real effort, but can you consolidate defaulted student loans? The good news is that in some cases you can. While you can repair it without consolidation that requires that you make payments on time for a period of 9 months to a year.

After that, the loan default is removed from your credit report so it’s as if it never happened. Your credit score will still be lower because the missed payments and late payments will still be there for 7 years, though the default itself is removed.

Can you consolidate defaulted student loans and avoid that? Yes, you can, after three months of on-time payments in a row. After that, you can get a federal student loan consolidation just as if you’d never defaulted. Doing it this way, however, does not remove the default from your record so your credit will take a more serious hit for that 7 year period than it would if you rehabilitate the loan first.

So can you consolidate defaulted student loans? Yes, but unless your need for a smaller payment is far greater than your concern about your credit score you may wish to first rehabilitate the loan by making 9 to 12 consecutive on-time payments first so that the default is wiped from your credit report.

If you ask, “can I consolidate my student loans more than once?” the answer is yes in only two cases. The first exception to the “once-only” rule is if you go back to school. If you do return to school, then your current student loans will go under what’s called deferment so that your payments are temporarily suspended while you’re in school.

Then when you finish the schooling, if you took out new student loans to pay for the school, you can apply for a consolidation loan that covers both the new and the old loan even if it was a consolidation. That’s one situation where the question, “can I consolidate my student loans more than once?” is answered with a qualified yes.

The other situation is if you have more than one consolidated loan. If you previously consolidated all your loans into one loan with one payment, you can’t just decide to re-consolidate that single loan. But if you have another loan and you want to combine the two loans, then you qualify for a consolidation loan that would combine the two loans into one and give you one monthly payment instead of two.

You should look at both loans carefully and determine whether it would be a good financial decision to consolidate them. And remember that you shouldn’t (and in many cases can’t) combine federal and private student loans or their consolidations.

If you have to that are eligible and in combining them you would benefit with much lower interest and/or payments, then doing so could be a very good decision. In some cases, one loan might have lower interest or not much left on the principle so that it would actually cost you far more in both money and time to consolidate it with a larger loan.

When you ask, “can I consolidate my student loans more than once?” and you find that you qualify for the exceptions to the general “no” just be sure that you’ll end up with a better deal by consolidating and that it’s right for you.

#1: One loan makes it easier to manage.

When you look into how to “consolidate my student loans” you’ll find that it’s incredibly convenient to have only one loan to repay instead of two or more. This is a top reason people consolidate all kinds of loans and debts. People will several credit card debts often consolidate them into one general loan payment because it’s easier to keep track of one debt than several.

For people will many student loans, consolidation can make keeping track and keeping up with payments easier. If you have both federal and private education loans, however, you’ll have at minimum two consolidation loans as federal loans have to be consolidation separately from private loans. Two loans are still better than several, so it’s often a good option when you have both kinds of loans.

#2: You can get a lower interest rate.

When you decide to “consolidate my student loans” you can gather all those loans into one and get a lower interest rate on that loan. This can save you money over time and help make repaying the loan more manageable. Federal student loans qualify for lower interest already, but getting an ever better rate with a consolidation is possible. That rate can be locked in so that if rates rise, your rate will never go up. The opposite holds true, though. If rates drop, you still pay the higher rate you renegotiated for. But you’ll never have to worry about fluctuating interest rates making your payment go up.

#3: You can get a lower monthly payment.

When you decide to consolidate, the standard repayment plan for the amount left on your loans is 10 years. Stretching the payments out over that length of time may lower your payments if you’ve paid most of your loans off. You can also decide to extend the loan to up to 30 years for the lowest payments. When you decide “I want to consolidate my student loans” that way, you will pay more in interest over time.