How it could hurt you
Consolidating doesn’t always make sense. In fact, there are certain situations in which you might lose a whole lot more than you gain by consolidating your student loans.
Eliminating possible repayment strategies: You could lose the ability to utilize several great repayment strategies if you choose to consolidate your student loans. For instance, the Debt Avalanche (paying off the loan with the highest interest rate first) and the Debt Snowball (paying off the loan with the smallest amount first) strategies both rely on your ability to pay extra on certain loans, while making the minimum payment on others. This obviously would not be possible if you consolidate all your student loans.
Losing benefits: You could lose out on some great borrower benefits you may not have considered if you choose to consolidate your student loans. This is especially true if you consolidate your federal student loans with a private loan; there are very few scenarios where that approach pays off in the long run. We’ll cover many of the benefits of federal student loans below, but here’s a few you could lose
Consolidating doesn’t always make sense. In fact, there are certain situations in which you might lose a whole lot more than you gain by consolidating your student loans.
Eliminating possible repayment strategies: You could lose the ability to utilize several great repayment strategies if you choose to consolidate your student loans. For instance, the Debt Avalanche (paying off the loan with the highest interest rate first) and the Debt Snowball (paying off the loan with the smallest amount first) strategies both rely on your ability to pay extra on certain loans, while making the minimum payment on others. This obviously would not be possible if you consolidate all your student loans.
Losing benefits: You could lose out on some great borrower benefits you may not have considered if you choose to consolidate your student loans. This is especially true if you consolidate your federal student loans with a private loan; there are very few scenarios where that approach pays off in the long run. We’ll cover many of the benefits of federal student loans below, but here’s a few you could lose
