What is a consolidation loan?
A consolidation loan combines several student loans (parent or student) from different lenders into one loan from a single lender. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct Loans. Some lenders offer private consolidation loans for private education loans as well. Generally, private loans cannot be consolidated with federal student loans.
Is it a good idea for me to consolidate?
The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated. Check the interest rates on your existing loans. If you have a 5% fixed rate on a Perkins loan, for example, and a 6.8% rate on a Stafford loan, you may be better off making multiple payments and paying off the Perkins loan faster, rather than lumping the Perkins loan into a more expensive loan and losing the low, 5% rate.
Where can I get a consolidation loan?
If you are interested in consolidating your loans, contact your existing lender(s) and find out how to initiate the process. Student loans can only be consolidated once.