Student Loan Consolidation, Good or Bad?

Student loan consolidation can be a great thing or a ball and chain attached to your ankle.  Most people use student loan consolidation to create one payment as opposed to three or more, depending on the number of loans. Companies such as Sallie Mae give you various other benefits to help you with managing your loans once they are consolidated.  Just consolidating loans to have one payment is not a smart decision. You should look at the amounts of your loans, look at your interest rates individually and look at the interest rate after consolidation. How would you pay the least amount of interest?  If paying your loans off individually pays less interest, then it would be better to do so. If the payments are too high, then negotiate with your lenders. Many are willing to work with you. For students with a very large amount of school loans, I would recommend loan consolidation. I would also recommend paying more per month than the amount they ask for. If your payment is $240 per month, then try and pay $250 per month. The more you can pay, the faster your balance will decrease and you will pay less interest.  Following this approach will help you pay your loans off way before you start drawing social security. That is a very good thing. If you encounter a period where you can’t afford your payments, talk to your lenders. They usually have programs setup to handle such problems. When dealing with loans such as these, it is best to focus on a cost effective strategy.