Though they can be a great way to finance your education, student loans must eventually be paid back. After graduation, you may find that your loan payments are more than you can handle. If this is the case, or if you just want to save money, you may want to consider consolidating your student loans.

Why You Should Consolidate Student Loans

By consolidating student loans, you can bundle all of your loans together into a single loan, which means that you will have only one lender and one payment to deal with. Student loan consolidation also gives you a chance to lock in at a low interest rate, which can save you a great deal of money over time.

The Cost of Consolidating Student Loans

If you consolidate your student loans, you can significantly lower your monthly payments by as much as 60 percent. Unfortunately, you may end up increasing the total amount that you will pay over the life of your loan. Before consolidating, you should carefully evaluate the interest rate and the loan terms. You should also take time to compare lenders.

Federal Loans Eligible for Student Loan Consolidation

Many federal student loans already have a low interest rate. However, you may be able to achieve a lower payment by consolidating these student loans. Here is a list of federal loans that are normally eligible for student loan consolidation:

• Federal Stafford Loans
• Federal Direct Loans
• Federal Perkins Loans
• Federal Supplemental Loans for Students (SLS)
• Federally Insured Student Loans (FISL)
• National Direct Student Loans (NDSL)
• Federal Parent Loans for Undergraduate Students (PLUS)
• Loans for Disadvantaged Students (LDS)
• Auxiliary Loan to Assist Students (ALAS)
• Health Education Assistance Loan (HEAL)