My rate was locked in during the summer of 2005, so I was lucky to get a very low rate.
Not only do you have a smaller payment, but your interest rate is locked in.
Right now, it appears that student loan interest rates could rise soon. If you don’t consolidate, your rate is essentially variable.
When you consolidate, though, you lock in your interest rate.
That means that you have various loans, and all of them have a 10-year repayment schedule. I got a lower rate and a lower payment, since my total repayment term had been extended to 25 years.
My monthly payments, all added together, ended up being right around $600 a month. Consolidation has worked well for me, and it can work well for many students, as long as you understand the risks.
The biggest advantage of federal student loan consolidation is that your monthly cash flow improves immediately.
My monthly payment went from almost 0 a month to 2 a month.
Once you finish college, you are likely to look at all of your student loan payments and sigh: How are you supposed to keep all of them straight? This is when many people start weighing the pros and cons of consolidating student loans.
Among the inconveniences of student loans is that each loan that you receive for each school year is often considered a different loan — and it has to be repaid separately, with its own interest rate.