Check out this prepayment calculator to see how paying off your loans faster saves you money.
Finally, consolidating multiple loans into one means you can no longer be strategic about how you pay them off.
This means you’ll spend more time paying off your loans – and pay more in interest over that time.
Plus, as mentioned, consolidation can result in a new, lower monthly payment that frees up some cash today – but if your consolidated loan has a longer term, you’ll lose more money in the long-run because you’ll pay more in interest.Therefore, it’s more expensive to pay off your loans this way,” she said.Bera added that because most people’s loans all have different interest rates and balances, paying off loans in order from highest interest rate to lowest is the best way to save the most money.Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns.Student Loan Hero is not a lender or investment advisor.What can be an advantage in one situation (like potentially reducing your payments) can be a completely moot point in another (when your repayment term is extended).It’s important to evaluate your own personal situation and run the numbers to see what strategy puts you ahead financially.Fee-only financial planners who specialize in working with Gen X and Gen Y and helping with student loan issues can be great resources in getting this question answered.If you’re asking, “should I consolidate my student loans? This is especially true if you’re not having trouble making your payments and you can target your repayment efforts to specific loans.For instance, you could target your highest interest rates first using the debt avalanche method.Or you might choose to pay off any private loans first since they tend to have less flexible repayment options. The pros and cons of student loan consolidation are closely interrelated.