Consolidation combines all your eligible student loans into one new loan with a fixed interest rate and may extend the repayment term (or the amount of time you have to repay the loan).

This may also lower the monthly payment and simplifies the repayment process because you only have to make payments to one company.

A Consolidation Loan is designed to help student and parent borrowers simplify loan repayment by allowing the borrower to combine several types of federal student loans with various repayment schedules into one loan.

If you have more than one loan, a Consolidation Loan simplifies the repayment process because you make only one payment a month.

Also, the interest rate on the Consolidation Loan might be lower than what you're currently paying on one or more of your loans.

And if you're in default on a federal student loan, you might be eligible for a Consolidation Loan if certain conditions are met.

Loan consolidating can be very confusing. Postcards that come in the mail saying “Consolidate Now!” can make it seem like a brainless endeavor, but what loan consolidation actually means to your finances in the long run is a puzzle to many people.

Loan consolidation is when several different loans are paid off by one vendor, who opens a new loan. This new loan allows you to pay just one bill instead of several different loans, possibly, from several different lenders.

There are benefits to consolidating debt, but there can be drawbacks, too. Depending on your own situation, you will need to discover whether consolidating loans or keeping loans separate is the best way to go.

But don’t wait until sometime down the road to consolidate. If you decide that consolidation is the best option for you, do it now.