Pros and cons of loan consolidation


With the current high tuition fees in many colleges across the US, it is hard to go through school without taking out several federal student loans. Eventually, many graduates end up with multiple student loans that they can’t afford due to unavoidable circumstances like unemployment.

The government has come up with several loan repayment plans that graduates can use to pay off their loans comfortably. These include:

• Income-based repayment plan
• Pay As You Earn repayment plan
• Standard repayment plan
• Income-Contingent repayment plan

If you still can’t adhere to any of the above repayment plans, you have other options like deferment, forbearance, and loan consolidation. Loan consolidation allows you to combine all your student loans into one single loan.

Loan consolidation makes your student loans manageable and ultimately less expensive. Here are some pros and cons of consolidating your student loans.


1. One payment

By combining all your federal student loans into one, you make one monthly payment to your lending institution. This means you save a lot of money and time as you don’t have to deal with multiple lenders. 

2. Lower payments

Loan consolidation offers a variety of repayment plans that lower your payments while extending your loan terms. For instance, if your repayment term before consolidation was ten years, it can extend to 20 or 30 years, lowering your payment to as low as 50%.

3. Avoid default

If you’re struggling to make payments, loan consolidation will help you avoid default by lowering your monthly payments.


1. More interest

Since loan consolidation allows you to extend the term of your loan, you end up paying more interest in the long run. Additionally, paying a loan for more than 25 years hinders you from purchasing a home or a vehicle.

2. Losing the grace period

Graduates usually get a six month grace period before they can start repaying their student loans. Unfortunately, if you consolidate your loans, you lose this grace period. After your loan consolidation is approved, you begin making payments two months later.

Hire us

StudentLoanify can help you with your student loan application and repayment options. Contact us today for quality guidance on student loan repayment options.