Student loans can be confusing, and learning about student loan debt consolidation is something that you definitely want to understand. If you are familiar with regular debt consolidation, then you already have a pretty good of idea of what this process is and all that it entails.
Student Loan Consolidation Defined
Just like a mortgage refinance or a credit card debt consolidation loan, you can bundle together your student loans into one student loan consolidation loan.
Basically is it taking all of your eligible student loans and turning them into a single loan.
Benefits of Student Loan Consolidation
The obvious benefit of consolidating your student loans is getting your student loan payments down to a single payment. In some instances, it even reduces the amount that you have to pay each month.
You can also end up with a better interest rate by bundling together your college debt into a single consolidation loan. This is because the interest rate on a student loan consolidation loan is the weighted average of the interest rates on all of the school loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at a rate of 8.25%.
As you can see, there is really no reason not to consolidate your student loans. In fact, I have consolidated mine. At least the ones that are not those nasty private student loans. However, there are some private lenders who do offer private student loan consolidation, but it is not something that I have sought out.