Consolidate Debt - Top 10 Tips

In search of debt consolidation advice? Then you've come to the right place. Our top ten tips on how to consolidate debt gives you a foundation to build off of and start digging deeper.

There are many concerns that come long with a debt consolidation loan and you need to address them if you're considering debt consolidation.  Below you'll find a list of the essentials that must be covered before you consolidate debt.

Top 10 Tips for a Deciding on a Debt Consolidation Loan

1. Decide if consolidating is right for you. Consolidating student loans is perfect for students who have a large balance across multiple lenders. If you consolidate, you can possibly lock in lower interest rates. Make sure to compare the terms of your current loans to decide if consolidation makes fiscal sense.
2. Consider the lender's customer service and reputation before signing. A lower interest rate isn't the only important thing to mull over before consolidating your loans. Research lenders and read what other customers have to say first.
3. Make sure it will increase your credit score if you consolidate. When you consolidate, you are reducing the number of open accounts on your credit report, which may increase your credit score.
4. Know that there are other options if you decide not to consolidate. Students also choose to serve in the Peace Corps and AmeriCorps or join the military for help paying off their debt.
5. Remember that consolidating could cost you more money. When you lengthen your repayment period while lowering your monthly payments, you end up paying off more interest over a longer period of time, which costs you more money in the long term.
6. Know the minimum balance needed to consolidate. Many lenders will only offer consolidation loans for borrowers with loan balances of at least $7,500. A few lenders will offer consolidation loans for balances of $5,000 or more.
7. Compare your consolidation options to your current lender's benefits. It's usually best to stick with your current student loan provider, but if you see a better deal elsewhere, it's definitely okay to switch.
8. Wait until after your grace period ends or shortly before to consolidate. Unless you ask for a deferment or forbearance, you will lose the remainder of your grace period if you consolidate beforehand.
9. Keep making your payments and don't let your loans go into default. It's much harder to consolidate loans if you are not keeping up with the payments.
10. . Do not consolidate your private loans with your federal loans. You are able to get lower interest rates on federal loans, and if you consolidate the two together, your private loans will negate the low interest rate of the public ones.