Examining options that could help relieve financial burdens is always a good idea. Your college student loan is one place to begin.

Colleges and universities use several sources in securing loans for qualified students. One bank does not typically issue an entire 4-year loan or even a 1-year loan. Usually, it takes multiple funds from various lending institutions to get a student through his college career.

That is the reason why you're writing several checks a month when paying your student loans. Of course, these loans carry with it different interest rates and different billing cycles. They may also have different borrowers benefits.

You don't have to be in a financial crisis in order to consider a private or government student loan consolidation. Sometimes, it's just smart money management.

STUDENT LOAN CONSOLIDATIONS ARE LOANS

First, let's understand that a student loan consolidation is a loan. You're getting one new loan that will pay off the multiple existing loans. Hence, at the end of the month, you get one bill instead of many. You pay one check, instead of writing a few. Consolidation can be very convenient.

THE GOOD: WHY STUDENT LOAN CONSOLIDATIONS ARE RIGHT FOR YOU

Besides the simplicity of a single check, there are other reasons that you should consider.

For example, when a student loan consolidation rate is lower than the average interest rate of your multiple loans, you may end up with a lower monthly payment. You can invest the money that you save.

Also, a lending institution may have more attractive consolidation incentives than what you currently have such as rebates or last month free.

Sadly, a borrower may have to consolidate in order to avoid defaulting in any of his existing student loans. As mentioned earlier, when consolidating, that borrower is in fact getting a new loan that pays off the existing loans. By doing so, the loan that is about to default gets paid down and is assumed as part of a new, but bigger, loan. By consolidating timely, that borrower avoids a very bad mark in his credit report.

THE BAD: WHY STUDENT LOAN CONSOLIDATION IS NOT FOR YOU

Just as there are good reasons for student loan debt consolidation, there are drawbacks that you must consider before speaking to a smooth talking consolidation counselor.

In fact, if there's one thing that you should remember from this article, then it should be this passage. Just because someone shows you a lower monthly payment, it doesn't always mean that you're saving money. The big picture could be the opposite. Because in order to get a lower monthly, the length of repayment may have been extended. So that your loan payment period is now 30 years instead of 10. Longer payment means higher cost of the loan.

Also, some programs that may be advertised as low interest student loan consolidation may not have forbearance or forgiveness provisions. These provisions can be helpful in tight fiscal situations. Lastly, if your current student loans have any attractive borrowers bonus, such as rebates, you may lose it.

WHAT TO DO

A good student loan consolidation program can save you money and ease your monthly financial burden. But keep this in mind, the best student loan consolidation is the one that's custom-made for you because your situation is different from the next borrower. Just like any financial products, you must shop. There are a number of online sites that let you compare student loan consolidation programs. The good ones list the banks, their rates, and the provisions. Use these sites as tools to your advantage.