Loan Consolidation for Graduate Students

Are All Your Loan Payments Sinking Your Budget?

Graduate school loan repayment can be a millstone around your neck. It is not unusual for students to graduate from professional school with over $100,000 in debt from numerous lending sources. Consolidation affords students and graduates the opportunity to more successfully manage their debt obligations.

Just as with undergraduate loan consolidation, a graduate student consolidation loan pays off all the original loans, leaving you with just one large loan. Your monthly payment will be smaller than all the little payments combined, and you will just have one bill to keep track of. While consolidation can be a great relief, if you do not plan carefully, it can wind up being very expensive, so you want to consider carefully whether consolidation is right for you.

When to Consider Consolidation

If you find yourself in any of these situations a consolidation loan might be right for you:

  • You have multiple federal and/or private student loans
  • You have been delinquent on any monthly student loan payments
  • You foresee large financial obligations that could put your monthly payments at risk.

Student Loan Consolidation Brings Some Real Benefits

  • Consolidation drastically lowers your monthly payment.
  • Consolidation enables you to save now for other investments in your future and family life, such as a house, starting a new business or starting a family.
  • Initially, consolidating your student loans improves your credit score because you have paid off a number of loans in their entirety and you will not have as many creditors.
  • Prepayment is not a problem, so when you have more money, you can put as much towards paying off the loan as you want. By doing this, you avoid the main drawback of consolidation loans – they can lower your monthly payment by extending the length of the loan, so if you take the full term of the new loan to repay the debt, you will pay much more in interest than you would have originally. By prepaying as soon as you have met other financial goals, you can realize the benefits of loan consolidation without the drawback.

If paying all your separate student loan bills is a burden that threatens to derail your financial future, talk to your lender about loan consolidation.