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Negatives of consolidating student loans

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More than 40 million Americans have student loan debt.On average, 2015 graduates left their campus with more than $35,000 in debt that they are responsible for paying back.

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If you have the ability to make a lump-sum payment or consolidate these loans, you may want to look at your options.A lower interest rate over 5 or 10 extra years can add up to more total interest paid over the life of the loan than you would have paid had you stuck with your higher-interest, but shorter-term loan.Make sure you’re you are considering your budget for all your needs and goals.Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.As you weigh the pros and cons, keep in mind that timing is critical.Dealing with one lender and one lump sum of debt can simplify the repayment process.

Even if you have several federal and several private student loans, you can consolidate that down to two lenders and two monthly payments. Before you consolidate your student loans, inquire about lender benefits so you do not lose any from the previous loans by merging them.

Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.

Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed.

With just a few exceptions, you get only one chance to consolidate with the government loan programs.

WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.

Pushing the limits of your budget to get rid of your student loans forever can leave the rest of your finances in disarray.