UW-River Falls

Loan Consolidation

The following information is provided to assist you in determining if a Consolidation Loan is in your best interests.

Benefits of Consolidation :

Locking into a fixed interest rate for the life of the loan.
Combining payments into one affordable monthly payment with single point of contact.
Deferment eligibility.
Extend your repayment, 12 to 30 yrs based on the amount borrowed.
Choose a flexible repayment plan that works for you.

Drawbacks of Consolidation :

Possible higher interest rate than the rate on some of the loans currently being held.
Possible payment of more interest with repayment over a longer period of time.
Loss of grace period.
May affect deferment eligibility.
May lose borrower benefits already in place.
Federal Perkins loan borrowers-Interest will begin as soon as you consolidate, rather than 9 months after you leave school; you will forfeit all cancellation benefits otherwise available to Perkins borrowers.

You do NOT have to include all of your loans in a consolidation. For example, if you want to keep Perkins loan separate because you might be able to cancel a portion, you can do that although you need to be aware that you will have a separate loan payment.

You may have received mailings and phone calls regarding consolidation from many different lenders and organizations, causing questions and confusion about the program. The Federal Consolidation loan program is regulated by the Department of Education which means that lenders use the same formula when calculating interest rates and determining repayment terms. You should contact your current Stafford loan lender for information on whether a consolidation loan is right for you.

If you have questions regarding consolidation or need information about your Federal loans, you may access the following websites:

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