Can a private student loan consolidation really lower your monthly payments? In many cases the answer is “Yes.” In some cases, the answer in “no.” Private student loan consolidation sometimes allows a borrower to extend the repayment term of the loan. More monthly payments on the same principle amount of debt will – all else being equal – lower the monthly payment. Frequently the monthly payment associated with private student loan consolidation is meaningfully lower when compared to the existing private student loans that have been taken out by the borrower. But it is important to note you could end up paying more over time because of interest.

In addition to extending the repayment, private student loan consolidation also sometimes results in a lower interest rate margin for the borrower. Since private student loans are made to students to help pay for their education – when it is not known whether the borrower will complete their course of study – and since many lenders have determined that students that complete their course of study are better credit risks than those that do not, graduates are sometimes able to obtain a better interest rate margin through a private student consolidation loan than they have with their existing private student loans. A better interest margin will – again all else being equal – result in a lower monthly payment for the borrower.

Because all factors in a private student loan consolidation may not be equal, it is important that borrowers find out all the necessary details of any private student loan consolidation they may be considering before making the decision to proceed.

With this being said, do private student loan consolidations make sense? The decision to consolidate private student loans also can provide many attractive benefits to borrowers, including many benefits that are similar to federal student loan consolidation – ability to lower monthly payments and the ability to potentially obtain a better interest rate.

A. Once a borrower has graduated from college, they are sometimes considered by many lenders to be a better credit risk (vs. those who have not completed their course of study). As a result, many lenders offer more favorable interest rates to borrowers who have graduated.

B. Private student loan consolidation also offers the ability to extend the loan repayment term, which frequently results in a lower monthly payment – many times significantly - when compared to the borrowers existing loans.

C. Most private student loan consolidations also offer no pre-payment penalties which means that borrowers can pay off their loan balance any time they feel comfortable – and at no additional expense to them.

D. Finally, private student loan consolidation offers the ability to roll all existing private student loans into a single loan with only one monthly payment to only one lender.

So, does this all sound like a benefit to you? Well, it could very well be. But perhaps not. Individual circumstances vary. You have graduated and are starting a new career with all that education you have. You do not need to be worrying about your private student loan payments, but you MUST begin repayment at some point. One way to potentially help lower monthly payments is to consolidate. As pointed out above the benefits are many. You are on your way to a happy, healthy, and a great financial life. Make it easy on yourself and make the right decisions by doing all the necessary research and considerations before signing on the consolidation dotted line.