Federal Loan Consolidation Disclosure

Always Consider the Cost

You should keep in mind that although consolidation can simplify loan repayment and lower your monthly payment, it also can significantly increase the total cost of repaying your loans.

Consolidation Loans

Consolidation offers lower monthly payments by giving borrowers up to 30 years to repay their loans. So, you'll make more payments and pay more in interest. In fact, in some situations consolidation can double your total interest expense. You should compare the cost of repaying your unconsolidated loans against the cost of repaying a consolidation loan. You also should take into account the impact of losing any borrower benefits offered under non-consolidated repayment plans. Borrower benefits, which may include interest rate discounts, principal rebates, or some loan cancellation benefits, can significantly reduce the cost of repaying your loans.

Once made, you cannot reverse Federal Consolidation Loans. That's because the individual loans that were consolidated have been paid off and no longer exist. Take the time to study your consolidation options before you submit your application. A checklist has been designed to help you determine whether and how you should consolidate your loans.

Source: Student Aid on the Web

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