|Fixed Interest Rate|
|If consolidating variable interest rate loans, you save money if you consolidate while variable interest rates are low.||Variable interest rates change annually. Therefore, if you consolidate your variable interest rate loans and the interest rates drop the following year, you have "locked" into the higher interest rate for the life of the loan.|
Single PaymentIf you have loans with multiple lenders/holders, you send a monthly payment to each. However, if you consolidate all those loans, you make a single payment.
Lower Monthly PaymentConsolidation loan monthly payments are lower because the repayment period is longer.
Loss of Deferment and Forgiveness BenefitsYou may not be eligible to receive the same deferments on your Consolidation Loan than what you were eligible to receive on your original loans. Also, you might lose eligibility for certain cancellation or forgiveness programs, especially if you are including Perkins Loans in the Consolidation. (In either case, check with your lender) .
More Interest PaidWith a longer repayment period you end up paying more interest over the life of the loan.
Manage Monthly BudgetSavings from reduced monthly payments allows you to pay other monthly bills with higher interest rates, such as credit cards, etc.
Remove Loans From Default StatusAfter making satisfactory repayment arrangements with the holder of your loans in default, you can consolidate those loans and reinstate benefits (deferments, eligibility to apply for financial aid, etc.) that were lost when your loans were placed in default.
No Extra CostsThere are no application or processing fees and there are no prepayment penalties.
Loss of Payment IncentivesYou may forfeit any payment incentives/discounts you are currently receiving (check with your lender).