Disadvantages of consolidating student loans
They should be consolidated separately, as the federal consolidation loans offer superior benefits and lower interest rates for consolidating federal student loans.Student loan consolidation is a great opportunity to organize your financial life and allow you to focus on debt elimination. Student loan consolidation typically makes good sense for most people.If your private education loan has a variable interest rate, you might consider using a fixed rate home equity loan to pay off the private education loan, effectively locking in the interest rate.You should not consolidate your federal student loans together with your private education loans.When you consolidate, you restart the length of your loan, which means you can repay your debt over a longer time.This will reduce your monthly minimum payment, but it will extend the length of time your are paying on this loan.Then, paying my federal loan off freed up an additional 5 a month, which I could then channel onto my two other student loans.
Private education loans tend to have interest rates that are in the same ballpark as home equity loans.
Therefore, it is important you weigh the pros and cons of consolidation carefully and to make sure consolidating your loans is in your best interest and worth the effort.