With college tuitions steadily on the rise, more and more people are unable to pay for post-secondary education out of their own pockets. Most students will apply for at least four separate loans during the length of their school term. Both Federal and Private student loans can, and should, be consolidated by way of a school-consolidation loan.

A school-consolidation loan is perhaps the best type of loan you could hope to have. With a school-consolidation loan, you'll be able to pay off all of your existing student loans from the credit you'll receive from the new loan. By doing this, you're reducing the number of creditors, monthly payments and interest rates you have.

Most school-consolidation loan interest rates will either match or be lower than your current student loans. If you've taken the time to ascertain exactly how much you'll actually be paying just in interest fees, you'll know that any decrease in interest could potentially save you thousands of dollars. This is due to the fact that, in all likelihood, it will take you at least a few years to be able to pay off all of your loans. A $10,000 student loan at a 10% interest rate will accumulate $1000 per year in just interest. Over four years that's $4000. A school-consolidation loan at say 7% would reduce that to just $2800 over four years, easily saving you $1200.

Another great benefit of a consolidation loan is the fact that you'll no longer have to deal with multiple minimum payments. This can be difficult to manage, especially if you have 8 different payments to make, all at different times of the month. With one simple bill, you're much less likely to miss a payment and will be able to budget your income that much easier.

You'll need to get separate school-consolidation loans if you have both Federal and Private student loans. With Federal loans, the biggest advantage of consolidating is the fact that nearly all Federal loans don't have a fixed interest rate. Consolidating will lock you onto a single interest rate, thereby saving you money when that lower Federal student loan interest rate fluctuates to the high side.

Perhaps the most helpful benefit of a consolidation loan is the fact that you can negotiate repayment terms to a length of up to 30 years. This will greatly reduce your minimum monthly payment if you feel you won't be able to pay it off any sooner. Be warned, though, the total interest fees of a 30 year loan compared to a 5, 10, or 15 year loan are significantly higher.

To be eligible for a school-consolidation loan, you must not be attending classes. When you apply for the loan, you typically won't even have to have a credit check. Therefore, your current credit rating will not be a determining factor as to whether or not you're eligible for a guaranteed consolidation loan.

Summary:

School-consolidation loans are available to students who're no longer regularly attending classes. These loans combine your existing student loans into a single loan, making it easy to manage and instantly improving your credit score while reducing the amount of interest charges you'll pay.