What are the disadvantages of loan consolidation?
You may pay more in interest if you consolidate. Loan consolidation generally extends the repayment term and lowers your monthly payment, which increases the interest you pay over the life of the loan. Accelerating your payments may also short the length of the repayment term to help reduce the interest cost paid. Click here to check different payment amounts and terms on our repayment calculator.
• Longer repayment period • Greater interest paid over the life of the loan because you are making smaller payments over a longer period of time • Possibility of limited deferment or forbearance options • May lose current loan forgiveness benefits • May lose current loan incentives You may want to carefully consider including Perkins, HPSL, and LDS loans in your consolidation. These loans: • Do not retain their deferment subsidy if included in a Federal Family Education Loan Program (FFELP) consolidation, and • Offer specific loan forgiveness programs which do not carry over to a FFELP consolidation.
