However, even if your student loans are already in repayment, you are still allowed to consolidate student loans and it still may be beneficial for you to do so. Whenever you consolidate student loans, if you do so while interest rates are still low but likely to increase, perhaps substantially, you would benefit in the long term.

As well as the loans themselves, attaining a license in certain fields can be impossible when you have defaulted student loan debts. You could even be excluded from some government contracts if you own a small business. With all these consequences, it’s clear that trying to avoid paying off your student loan is no way to start your financial life after college.

Surprisingly, only about half of the students coming out of college have actually gained their degrees. It can be difficult to stay in school when you’re struggling under financial burdens, and even harder to return. But, student consolidation loans that help you stay current on your payments and successfully pay off your loans, mean there is one less barrier to returning to school, and keeping your credit rating clean is much easier.

By consolidating, your student loans will become easier to manage and pay off. Even when the loans are consolidated, you can retain your right for forbearance as well as for deferment. You can even take advantage of income sensitive and graduate repayment options which you might not have encountered before while you had multiple loans.

A good credit score is very important when you are looking for a job (employers sometimes check your credit and don’t want to see “black marks” there), renting an apartment (landlords want someone who has a good record of paying on time), opening a new credit card account, or seeking a loan for a car.

Here are some tips for you that explain how consolidating your student loans may affect your credit score:

• The more open accounts you have, the lower the credit score:As a student borrower, you might have up to eight separate loans to pay for your education. Each loan has a different principal amount, payment terms and interest rate.  The more accounts you have, the lower the overall credit score. So, reducing the number of open accounts by consolidating all those loans into one, may improve your credit score.
• The lower your monthly loan payment obligation is, the higher the score:The total amount of your monthly minimum payments on loans and credit lines is taken into account when calculating your credit score, and the higher that payment commitment is, the higher the score will be. When you hold several loans, the payments on all those loans are added together and considered part of your monthly payment obligation. If you consolidate your loans, you have only one monthly payment to make, which is normally lower than the minimum amount would be if you still had multiple separate loans.
• Your debt to credit ratio is important:The debt to credit ratio measures the amount of debt you have against the amount of credit you have available. So, if you have a total of $10,000 available on three credit lines and you owe $2,000, your debt to credit ratio will be lower and your credit score better than if you owe $2000 while you have $3000 of credit available. If you have several loans with the maximum credit used, it will reflect negatively on your credit score.

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If you manage the consolidation process correctly and get a fixed rate consolidation loan at a at today’s low rates, and you make your regular payments on the loan, you will save money on interest over the long haul as variable interest rates rise.

Another convenience of consolidation is that you go from tracking multiple loans with different dates and rates, maybe from different lending companies or banks, to just one loan from one place.

Some consolidation loans come with added bonuses like payment and interest rate reductions when you pay your debts on time over a certain period, or if you arrange to make your payments automatically from a checking or savings account instead of by writing an individual check every month.

• Interest Savings – if your loans are at higher rates than those available currently on a consolidation loan, you may benefit from the lower rates.
• Improved Credit Score – reducing the number of your different loans, and reducing the monthly payment you are committed to, may (depending on your financial state apart from the student loans) increase your credit score.
• Returning to School – if you left school for any reason before finishing up everything you planned to, you may wish to return later to finish. If a student consolidation loan makes it possible for you to continue paying your loan instead of defaulting, then you’ll protect your ability to return to school with new financial aid.
• Hiding from Student Loans is Impossible – student loans are one of the loans which are not discharged by bankruptcy. Defaulting on a student loan can mean that money is automatically pulled out of your wages or tax refund to pay, or you might even lose your professional license in certain fields. A student consolidation loan may make it easier for you to pay, and therefore prevent these very unfortunate results.

There may be a variety of reasons why you might consider consolidating your student loans – some may be related to a desire to reduce the overall cost of the loans, others may be to do with financial problems which make it difficult to pay back the loan.

Whatever the reasons, the most important thing is to do your homework and your research so the loan consolidation process results in real benefits for you, without unanticipated costs or drawbacks.

Student loan consolidation can help many borrowers.  It is important to note that interest rates are unlikely to stay at their current low levels indefinitely. In fact, they are so low now that the only place for rates to go is up!  So, if you are now – or about to start – paying off those student loans, and they are at higher interest rates than what you could get now, it’s worth considering how to save every cent you can by consolidating your college loans.

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If you’re in a hole, the first thing to do is stop digging! If you have been using the cards to make up for a gap between income and expenses, it’s very important to close that gap – by both reducing expenses (many people can do this almost instantly by, for example, cooking evening meals at home instead of eating out, brown-bagging lunches, using public transit instead of driving, cutting back on cable TV and telephone expenses) and increasing income (by, for example, taking a second part-time job, freelancing online or offline, making and selling crafts, offering childcare…).

Other tactics can include:

• moving the balances to a card with a lower rate (either by asking for a lower rate on an existing card, or getting a new card with a lower introductory rate)
• taking out a lower rate loan to consolidate credit cards
• using long-term savings to pay them off. Whether this is a good idea depends on the kind of savings and what your tax situation is. Get knowledgeable advice before you touch any retirement savings!

Credit card problems can be solved, but your behavior has to change to do so. You can’t fix a problem by acting the same way that caused the problem in the first place. Problems with credit card debt can also cause trouble by (lowering your credit score) if you’re trying to consolidate your student loans. Make it a priority to focus on paying off that high interest credit card debt.

There are both non-profit and for-profit credit/debt counseling organizations who can help with student loan debt as well as ordinary debt. Wherever you go, make sure the organization is reputable and will not make your problems worse by landing you with an unnecessarily expensive loan you won’t be able to pay off, or fees which you can’t afford. Check online for negative or positive reviews or comments by people who have used the company. Check with your local Better Business Bureau.

One way to do this if you own a house is to get a debt consolidation home equity loan, which uses your home as security. While this may end up as your only option, the danger is that if you cannot pay off the loan, you may lose your home as a result.

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