When students research consolidate student loan information, they often hear that one of the biggest benefits is streamlining their payments by turning multiple loans into one. Having to make only one loan payment is one of the big advantages to student loan consolidation, but you don’t have to have multiple loans to take advantage of consolidation.
Most lenders will only consolidate student loan debt at a minimum amount. If you do not meet the lenders’ minimum debt requirements (typically $7,500, but maybe as low as $5,000), you won’t be eligible to consolidate. However, you can meet that minimum debt requirement with just one loan. If you have more than one student loan, you may want to apply to consolidate all of them, but you can consolidate student loan debt with just one or two or a few loans you select, too.
What’s the advantage of consolidating student loan debt if you only have one loan? You can reduce your monthly payments by extending the period of your loan. Students that have recently graduated from college often face high cost of living expenses. They may need to relocate for a new job, buy furniture, or purchase a car. When you consolidate student loan debt with even only one loan, you’ll free up some cash you can use to cover other expenses.
Reducing your monthly student loan payments so you can afford other expenses can help in one other way. It may help students avoid paying for items with credit, so they don’t accumulate any more debt than they already have from financing their education.