Consolidate Federal Student Loans - Advantages and disadvantages


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As you approached your graduation from college, more than likely you've already had consolidation services contacting you about your student loans. Of course, as you are bombarded with all this information, it can be difficult to figure out whether or not consolidating your federal student loans is the right option. This type of consolidation is only for federal loans, and there are both advantages and disadvantages for you to consider as you make your decision on federal consolidation.

Advantages:


When you go with a federal consolidation loan, your credit won't matter. They don't do a credit check and your credit won't affect the rates you get on the loan.
If you need to pay off the loan early, you won't get a prepayment penalty.
There are no fees that have to paid in order to take advantage of a federal consolidation loan for your college loans.
Disadvantages:


If you decide to consolidate while you are still in your grace period, you will end up losing the rest of the grace period that you have left.
When you consolidate, you may lose some of the special benefits that come with particular loans, such as the Perkins loan.
If you've already paid off quite a bit of your college loans, then it may not be worth it to consolidate those loans.
There are definitely advantages and disadvantages to consider before deciding that federal student loan consolidation is right for you. Carefully look at both sides of the situation and make the right decisions, that gives you the greatest financial benefit.

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