WEBVTT

1
00:00:14.000 --> 00:00:17.999
Loan consolidation is something many students have found
really useful.

2
00:00:18.000 --> 00:00:21.999
Combining all your loans into one loan has a lot of
positive points,

3
00:00:22.000 --> 00:00:28.999
but it also carries a few risks. Let's go over some of the
pros and cons of consolidation. 

4
00:00:29.000 --> 00:00:32.999
One definite pro is that consolidation gives you just one
monthly payment to make. 

5
00:00:33.000 --> 00:00:37.999
You may have several loans being handled by several
different servicers.

6
00:00:38.000 --> 00:00:40.999
That means you have to make several separate payments
each month.

7
00:00:41.000 --> 00:00:46.999
Consolidation combines all those loans into a single loan
handled by a single loan servicer.

8
00:00:47.000 --> 00:00:49.999
This leads to another pro: you can choose your
loan servicer, 

9
00:00:50.000 --> 00:00:53.999
one that best suits your own situation.

10
00:00:54.000 --> 00:00:56.999
There are many other advantages to consolidating your loans.

11
00:00:57.000 --> 00:01:00.999
Check out the PDF at the end of this course section for more.

12
00:01:01.000 --> 00:01:03.999
Consolidation also has a few cons.

13
00:01:04.000 --> 00:01:07.999
It can increase the length of your repayment period, 

14
00:01:08.000 --> 00:01:10.999
meaning you'll pay more interest over the life of the loan. 

15
00:01:11.000 --> 00:01:13.999
And the interest rate on your combined loan may be higher...

16
00:01:14.000 --> 00:01:16.999
...than the rates on some of your individual loans. 

17
00:01:17.000 --> 00:01:20.999
Another thing to keep in mind is that you can't consolidate
your private loans. 

18
00:01:21.000 --> 00:01:23.999
Federal loans only.

19
00:01:24.000 --> 00:01:25.999
So before you go ahead and consolidate your loans,

20
00:01:26.000 --> 00:01:28.999
make sure you have the complete picture of what your payment schedule,

21
00:01:29.000 --> 00:01:33.999
interest rate and total costs will be after consolidation.

22
00:01:34.000 --> 00:01:37.999
If you think you're ready to consolidate, simply log into
your student loan account...

23
00:01:38.000 --> 00:01:43.999
...at studentloans.gov and begin the online consolidation application.

24
00:01:44.000 --> 00:01:47.999
Keep in mind that you will need to continue to make your
regular payments... 

25
00:01:48.000 --> 00:01:50.999
... until your consolidation application is fully processed.

26
00:01:51.000 --> 00:01:54.999
And, by the way, this is a FREE service for your federal student loans.

27
00:01:55.000 --> 00:01:59.999
So if you get a so-called deal in the mail from someone
offering to do it for a fee,

28
00:02:00.000 --> 00:02:02.000
put that offer in the recycle bin.