| Unpaid student loans can lead to a real financial | | | | All student loans include a grace period of six months |
| disaster if not managed properly. Student consolidation | | | | after which the loan repayment actually begins. This |
| loans are an effective debt management strategy | | | | grace period starts once the student has completed |
| highly beneficial for both students and lenders. | | | | his/her studies and is in the job market. Interest rates |
| The term 'consolidation' is a misnomer in case of | | | | on student loans tend to increase once this grace |
| student consolidation loans. In reality, none of the loans | | | | period is over. Hence, students willing to consolidate |
| are consolidated. In case of student consolidation loans, | | | | their loans should opt for the same during the grace |
| all the existing debts of the student are paid off by the | | | | period. |
| lender. Now the student is left with a new loan with a | | | | Another advantage of a student consolidation loan is |
| new interest rate and new repayment plan. Apart | | | | that one does not bother about maintenance of bills or |
| from the advantages, student consolidation loans are | | | | multiple payments. Only one single monthly payment |
| associated with certain pitfalls and need to tread | | | | has to be made to a single lender. |
| carefully. | | | | According to the federal law, if all of the borrower's |
| The most significant advantage of a student | | | | existing student loans have been obtained from one |
| consolidation loan is the longer repayment period of up | | | | single lender, the borrower must make the first request |
| to 30 years. Interest rates are also low and the | | | | to the same lender for a consolidation. If the loans are |
| student is required to pay less towards monthly | | | | present with multiple lenders, the borrower may |
| payments. However, the negative side of this | | | | contact any of them or any other private lender for a |
| arrangement is that extending the loan term will | | | | loan consolidation. |
| increase the amount paid towards interest. | | | | |