It also means if you're a new grad with little credit history, you might need a co-signer to be eligible.
If a co-signer is necessary, O'Connor says borrowers should ask if there's a co-signer release option after a certain period of time."With (our student loan program), if the borrower makes 12 months of on-time principal and interest payments, they can request to release the co-signer," he says.
Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D.
Consolidation provides grads with the ability to combine their student loans into one megaloan, but it comes with drawbacks.
Along with gaining a new degree, many graduates will also leave campus with new student loan payments they'll have to fit into their post-graduate budgets.
When eyeing consolidation options for private loans only, Mayotte says borrowers should evaluate the new loan's hardship protections and repayment terms in addition to the interest rate."If the terms you're going to get are the not as generous as the terms you already have, consolidation is probably not a good idea," she says.
Regardless of whether consolidating federal or private loans, there is a catch.
Should borrowers pay off their loans early, they can save hundreds, sometimes thousands, in interest charges."Would it be nice to have just one loan where you make that one loan payment every month? We ask that you stay focused on the story topic, respect other people's opinions, and avoid profanity, offensive statements, illegal contents and advertisement posts. Bankrate reserves the right (but is not obligated) to edit or delete your comments.