In most cases consolidating many loans into one new one will help your credit score, but depending upon the age of your loans and some other factors, it is possible that it goes down.

However, the consolidation decision really comes down to dollars and cents. If you can save money by doing it, it is a good idea. The credit score change in either direction is slight.

You certainly don’t want to consolidate just because it might help your credit score… it should only be done if it will save you money.

Hopefully you can use this tool to separate the good options from the bad and use your good credit to get lower payments. Just make be careful with refinancing because it means giving up a lot of perks with the federal loans and there is no way to undo it.

The important thing is that you the borrower realize the federal perks that you are giving up: such as income based repayment plans and student loan forgiveness.

If you are in a situation where you will definitely be paying off your federal student loans as fast as possible and an in full, and the only question is how much interest you will be paying on your way to a zero balance, then private consolidation could be a great option. (Just be sure to shop around to make sure you are getting the best rate: https://studentloansherpa.com/student-loan-reviews/

However, private loans are a different story. If you have private loans and you want to consolidate just one, you could lock in a lower interest rate. In this case, it would technically be called refinancing rather than consolidating, but the process is similar.

Does that make sense?

One thing to keep in mind is that regardless of what length you pick, you always have the option of paying extra to pay it off much faster.

Are their any other financial goals that you have coming up? You should consider how these options affect your ability to buy a house or save for retirement.

Mines did too. 48 points!!