Borrowers can consolidate (combine) multiple federal student loans with various repayment schedules into one loan, making a single monthly payment. With a consolidation loan, your monthly payment might be lower, you can take longer to repay, and you will receive a fixed interest rate on your consolidated loan (based upon a weighted average of the interest rates on all the loans you consolidate).
Carefully review your consolidation options before you apply. Things to consider are:
- Whether you'll lose any borrower benefits if you consolidate, such as interest rate discounts or principal rebates, as these benefits can significantly reduce the cost of repaying your loans;
- Whether you might lose some discharge and cancellation benefits if you include a Federal Perkins Loan in your consolidation; and
- Whether consolidation will increase the total cost of repaying your loans. Because you may have a longer period of time to repay, you'll pay more interest.
Generally, you can consolidate:
- After you graduate.
- After you leave school.
- After you drop below half-time enrollment.