Advantages and Disadvantages of Consolidating U.S. Government Loans

Before reading this article please read its first part Student Consolidation Loans

The advantages and disadvantages of consolidating your federal student loans is mainly depends partly on how much you owe, how much you've already paid, and other personal financial variables. But here are some Advantages and Disadvantages you can consider-

Advantages


1. Your monthly payment will be lower if you take the Government loan consolidation.
2. You have the opportunity to pay the loans back over an extended period of time- up to 30 years.
3. One convenient monthly payment is enough for your loan.
4. No fee for consolidating your government student loans
5. No credit check when you consolidate your government student loans
6. No penalty if you pay the loan earlier.
7. Loan application process is much earlier than it is for other kinds of loans

Disadvantages

1. You may take an extended payment plan to reduce your monthly payment but you have to pay more interest in the long run. This could cost you thousands of dollars if your student loan is large and will have a negative impact on your financial future.
2. If the consolidated student loan interest rate will be higher than the interest rates on your other loans than consolidation is not for you.
3. You have to remember that if you consolidate your loans during the six month grace period after graduation you will lose the remainder of the grace period.
4. If you have already paid off a large portion of your student loans, consolidation may not be a good choice.

Source- Jupitar's Hub