When it comes to the Student Loan Consolidation Program, you should be aware that there are some PROS and CONS. The last thing you want to do is make a rush decision that could negatively impact your financial outlook. That’s why it is important that you understand; on one hand, there are many good reasons to obtain a student consolidation loan. On the other hand, there's an equal amount of considerations that borrowers will need to think about before actually affirming that the Student Loan Consolidation Program fits their financial goals.

The Positive Side of Student Loan Consolidation Program

On a positive note…

• You simplify your finances by making one monthly payment to one lender
• In most cases, your monthly payment is lowered
• Loan terms range anywhere from 10 years all the way up to 30 years
• The interest rate on a federal consolidation loan is fixed, unlike variable interest rate loans that can change
• Your consolidated loan's interest rate will be equal to the average of all the student loans you want to consolidate, which is then rounded up to the nearest 1/8 percent
• The maximum rate your loan can be is 8.25 percent
• There are no fees associated with these loans
• There are no credit checks
• There are no prepayment penalties
• Lenders are aggressively courting your business with incentives called, "Borrower Benefits," that can offer you cash back, reduced rates, principal reductions and other goodies.

The Negatives Side of Student Loan Consolidation Program

On a negative note…

• You usually extend your loan's term; the number of years it's going to take to pay back your consolidated loans, which in turn adds to the total cost of the loan. Because you are financing for a longer term, you end up spending more money in the long run.
• Consolidation can double total interest expense
• You could lose borrower benefits on any unconsolidated student loans
• Only 20% to 25% of students who consolidate their loans actually qualify for the, much touted, “Borrower’s Benefits”
• Once you agree to the terms and conditions of your new consolidated loan, you lose all of the terms and conditions of your previous student loans 

As you can see, there is no pat answer when it comes to deciding if you’re going to go apply for a Student loan consolidation. However, if you take these three steps, your decision will become crystal clear.

Step #1

Ask Prudent Questions

• How much am I actually consolidating?
• Am I willing to stretch payments for 10 years or more?
• Do I reasonably believe I will be able to meet the lender’s requirements to receive the “Borrower’s Benefits?”
• What are the terms of repayment?
• Are there any penalties for paying the loan off early?
• Can I receive a lower interest rate if I apply with a co-signer?

Step #2

Only Borrow What You Need
For some people, the temptation to borrow more than they actually need is too hard to resist. Take care to borrow only what you need to cover your education costs, not what you are eligible to receive.

Step #3

Get Advice From The Experts

Prior to applying for a Student loan consolidation, you really need to seek advise from the experts. Not from people hawking or selling loans, but from people such as your school’s financial aid officer and websites such as www.StudentLoanWhiz.com