Loan Consolidation

Make sure consolidating your student loans is right for you.

Student loan consolidation allows you to combine one or more existing student loans into a single new loan. If you're having trouble making your monthly student loan payments, then consolidation might be the right option for you.

Consider This First

  • More interest to repay.
    Although a consolidation loan offers a longer repayment term and lower monthly payment, you will have a much higher interest payback over the life of the loan because you're making smaller payments over a longer period of time.
  • Eligibility.
    Effective June 1, 2008, borrowers must have at least 1 PHEAA/AES-guaranteed loan to be eligible for loan consolidation.
  • Explore other options first.
    If you can manage a smaller payment or if you're experiencing a financial hardship, you might want to consider other options.

Pros and Cons of Consolidation

There are advantages and disadvantages to consolidating your student loans. We've included some below to help you make the best decision for your situation.

Federal Loan Consolidation

Pros Cons
  • Lower monthly payments
  • Pay just one bill to just one lender
  • No prepayment penalties
  • Extend your repayment period
  • Fixed interest rate
  • No limit to the number of loans that may be consolidated
  • No required minimum balance per federal rules
  • Longer repayment period
  • More interest to pay back
  • May lose current loan incentives
  • Interest rate is calculated as the weighted average of all loans being consolidated, then rounded up to the nearest 1/8 of a percent
  • Perkins loans do not retain their deferment subsidy

Learn more about Federal Loan Consolidation.

Private Loan Consolidation

Pros Cons
  • Lower monthly payments
  • Pay just one bill to just one lender
  • No prepayment penalties
  • Extend your repayment period
  • You do not need a co-signer
  • Origination fees as low as 0%
  • Longer repayment period
  • More interest to pay back
  • Interest rates and fees normally based on credit score
  • Must have a minimum loan amount of $7,5000

Learn more about Private Loan Consolidation.

How to Apply