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Consolidating Your Student Loans - The Pros and Cons

Updated on January 16, 2012

Is Loan Consolidation always good?

Saving money is always a good thing no matter how you look at it, and consolidating student loans is definitely one way of saving money. To a person with enormous student loan debt, it seems like a perfect solution. Just make sure to do all your research and consider everything before you jump in with both feet. It can definitely lower monthly payments which can help you stay afloat while in debt. There are benefits, but drawbacks as well to loan consolidation.

Rolling all the separate loans into one is a good thing, but if you take the route of stretching it out over decades then that is a negative for sure. You end up owing too much overall, and the banks definitely win in that case. Consider this when the options are presented to you. There are a lot of intricacies involved with loan consolidation and included in that are pitfalls. So just be aware.


Taking your situation and all the details into account

Its true the experts say you can benefit from a loan consolidation, but your personal situation is the defining factor really. It may not be as good for some as it is for others. It is good in the sense it can give you some immediate relief and that is worth a lot sometimes to many families. If there is some relief from the intense stress of debt, that is actually often worth more than a lot of money sometimes in life. Balance these things out.

Make sure that you consider deferment as another alternative. This also can lessen your debt burdens. Some people have been paying on their loans for years, and are really not that far from paying them off. It is often much more prudent to stick with the current plan than to change things up with consolidating. You don't need a new extended time period for which to pay off something you were closer to paying off previously. You would be paying much more interest then, and for what?



There are a few main drawbacks to student loan consolidation. As stated prior, paying more interest on the loan for a longer period of time only gives an initial impression of helping you in regards to numbers on paper. The loaner is the one that benefits off of people's potential ignorance on the subject.

The other things to consider is that with your student loans, you may have had some privileges you may not know of or that you forgot about. Sometimes there are forbearance options, deferment options, cancellation options and grace periods offered with federal loans.  Sometimes more benefits can be cancelled out should you consolidate. The decision and action of loan consolidation is permanent once you take that route.   It is all about weighing your options.

Some views on Student Loans, some things to think about.


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    • oceansnsunsets profile image

      Paula 7 years ago from The Midwest, USA

      Thank you Azurahalla.

    • azurahalla profile image

      azurahalla 7 years ago

      thank you for the HUB

    • oceansnsunsets profile image

      Paula 7 years ago from The Midwest, USA

      Thank you Phoenix.

    • PhoenixV profile image

      PhoenixV 7 years ago from USA

      Great information on student loan consolidation.

    • oceansnsunsets profile image

      Paula 7 years ago from The Midwest, USA

      Soni, thank you very much!

    • oceansnsunsets profile image

      Paula 7 years ago from The Midwest, USA

      BJ, I know of a lot of families that leave the finances to those that it comes to more naturally and that seems to work out best. My husband actually does all our bills, and I am very thankful for that. I do my own, my bills that are just under my name though, etc.. Glad you stopped by and thank you for the comment!

    • soni2006 profile image

      Rajinder Soni 7 years ago from New Delhi, India

      This is an excellent hub which shows both sides of a coin, student loan consolidation. I salute the writer.

    • BJBenson profile image

      BJBenson 7 years ago from USA

      My family is learning about all this stuff. NOT Me! I let the other half deal with money.

      Great hub by the way