Do's and Dont's of Student Loan Consolidation

Student loans are a type of debt that almost everyone can commiserate about. We all want to go to college and the majority of us simply can't afford to do that without some sort of financial assistance. Working full-time while attending college is too energy-sapping for most people so we turn to student loans and other financial aid to fund our education. Everything is fine until six months after graduation when those student loans come due.

If you have multiple loans from several different lenders, the problem of student loan debt can get overwhelming. Each lender expects you to pay a minimum amount each month while the interest rate is causing the overall debt to increase. You struggle to pay the minimums and get behind on other bills while the amount that you owe just keeps getting bigger. The answer for many people is student loan consolidation.

Student loan consolidation can be a great way to make your debt manageable. However, there are pros and cons to using this method of resolving your debt. Following some simple Do's and Don'ts can help you to make sure that you deal with your debt in a positive way.


  • Get a low interest rate. Your student loan consolidation rate should be less after consolidating than any of the individual loans were.
  • Maximize the consolidation by including every debt. That includes Sallie Mae, Stafford Loans, PLUS loans and private student loans.
  • Read the fine print. It's imperative that you always read the terms and agreements of any loan. You likely didn't do it when you got your student loans which is why you're in this position in the first place. Make sure you do it this time.
  • Comparison shop. It may sound silly to shop around for a consolidation loan but the benefits are worth it. To make sure that you get the best deal you'll have to put in some effort.


  • Get a loan with a repayment length that will make your debt increase. A 30-year consolidation loan sounds good but it means you're going to be paying a whole lot of money in the end.
  • Take private loans to consolidate. You want to get a student loan through a reputable consolidation company.
  • Assume that this is the only option. There are many different types of assistance for paying back and deferring student loans. Make sure that you review all of your options before you make a decision.

The main thing to keep in mind when consolidating your student loans is that you want to improve your immediate financial situation without causing harm to your future finances. If a consolidation loan sounds too good to be true, it probably is. Read all of the fine print and comparison shop before choosing the consolidation plan that seems right for you.

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