Compare Student Loan Consolidation

By: Michael W
To most of the fresh graduates out there, it is a painful issue to pay back the loans they have taken to support their college or university studies. If you are currently paying multiple interest rates to multiple loan agencies, you should know how that feels. Have you ever imagine that you can save thousands of dollars by consolidating your student loans? In fact, you can either go for federal student loan consolidation or private student loan consolidation.

Loan agencies

As the name implies, federal loan consolidation is offered by the federal government. It doesn’t need credit check or co-signer (guarantor) because this loan consolidation program is protected by the federal government.

Private student loan consolidation is offered by banks, loan agencies or credit unions. And depending on the loan agencies, you might need to provide a co-signer or get your credit history check.

How they work

Both programs are meant to combine the multiple loans you have into one loan and extend your loan period so that you can enjoy lower monthly payment. For federal student loan consolidation program, you can only combine your federal loans. But for private student loan consolidation, it is possible to consolidate your student loans together with your personal loans.

Besides that, when you are going for federal student loan consolidation, your interest rate will be lock at the current low interest rate for the whole loan period. For private student loan consolidation however, your interest rate might fluctuate with the market rate. You can try to talk to the loan agency to look at the possibility of getting the lowest interest rate.


You can improve your credit score when you consolidate your student loans with both programs. This is because when you have consolidated your loans, you are being seen as servicing one single loan instead of multiple loans.

It is said that you will enjoy lower interest rate with federal loan consolidation. However, you can negotiate with the private loan agencies to see if there is any alternative for you to get a better interest rate.

And for your information, you are allowed to consolidate once with private agency and once with federal agency. So, think properly before you sign up for any student loan consolidation program.
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2 Responses to “Compare Student Loan Consolidation”

  1. As a blog reader, I am always on the search for content that are both awesome and helpful to digest and I must say your blog passed with high honors. Many thanks for the enlightening information you have shared! Will be coming back soon!

  2. I was wondering if anyone could figure out what the midterm elections could possibly imply pertaining to free college scholarships. It feels the Republicans will start looking to slash anything they can cut and that almost certainly means scholarships for higher education. I just don’t understand exactly how these people think this nation will ever be competitive, if the actual cost of higher education continues to go up, but grants end up being more difficult to acquire. It is depressing to imagine I’ll be in debt $40,000 or even more as well as not really knowing when I can actually get a job after I graduate in this economy.

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