Should You Consolidate Student Loans? Pros and Cons

Apr 20, 2021


Welcome to Life Designers' comprehensive guide on whether you should consolidate your student loans. Our consulting and coaching expertise allows us to provide you with detailed information on the pros and cons of loan consolidation, empowering you to make an informed decision about your financial future.

What is Student Loan Consolidation?

Student loan consolidation is the process of combining multiple student loans into a single loan, often with a lower interest rate and a longer repayment term. Consolidation can simplify repayment and potentially save you money in the long run.

The Pros of Consolidating Student Loans

1. Simplified Repayment

Consolidating your student loans allows you to make a single monthly payment instead of multiple payments to different lenders. This simplifies your financial management and reduces the chances of missing payments.

2. Potential for Lower Interest Rates

By consolidating your loans, you may qualify for a lower interest rate on your consolidated loan. A lower interest rate can significantly reduce the amount of money you need to repay in the long term.

3. Extended Repayment Term

Consolidation often comes with the option to extend your repayment term, allowing you more time to pay off your loan. This can be especially helpful if you're facing financial challenges or have other financial obligations to prioritize.

4. Convenience and Streamlined Loan Management

With a consolidated loan, you'll only have to deal with one lender and one set of terms. This makes it easier to track your payments, stay organized, and manage your loan effectively.

The Cons of Consolidating Student Loans

1. Loss of Certain Loan Benefits

When you consolidate your student loans, you may lose certain benefits associated with your original loans, such as interest rate discounts, principal rebates, or loan cancellation options. Consider the potential loss of these benefits before deciding to consolidate.

2. Potential to Pay More in Interest

While consolidating can lead to lower interest rates, it can also result in an overall increase in the amount of interest you pay. This can happen if you extend your repayment term, despite securing a lower interest rate.

3. Limited Repayment Plan Options

Consolidation may restrict your repayment plan options. If you're currently enrolled in an income-driven repayment plan, consolidation might not be the best choice for you as it could eliminate certain plan benefits. Evaluate your repayment plan needs before proceeding with consolidation.

4. Resetting the Clock on Loan Forgiveness

If you're pursuing loan forgiveness through programs like Public Service Loan Forgiveness (PSLF), consolidating your loans will reset the clock on your qualifying payments. This means you'll need to start over with a new repayment period, potentially delaying your eligibility for loan forgiveness.


Deciding whether to consolidate your student loans is a personal choice that should be based on your individual circumstances and financial goals. Life Designers' consulting and coaching services aim to provide you with the necessary information to make an educated decision. Consider the pros and cons outlined above, and seek personalized guidance to ensure consolidation aligns with your long-term financial strategy.

Remember, Life Designers is here to support you throughout your journey. Contact us for trusted consulting and coaching services in the field of life design and financial management. Together, we can create a brighter future.