If your loans need a tune-up, there are several ways to simplify life and reduce your expenses.
Two of the most common options include debt consolidation and refinancing.
You might need to do one or both of those, so get familiar with what they do (and don’t do) for you.
First, it’s helpful to clarify the differences between student consolidation and refinancing a loan.
Refinancing is when you replace a loan (or multiple loans) with a completely new loan – ideally a much better loan.
True consolidation only makes sense (and it's only possible) if your student loans originally came from government programs.
Second, you may be able to set up a consolidation loan that lets you pay off your debt over a longer time than your current creditors will allow, so you can make smaller payments each month.
That's particularly helpful if you can combine it with a lower interest rate as well. Basically, you borrow a single, lump sum of cash that's used to pay off all your other debts.
Life can deal you unexpected hands such as health concerns, relationship breakdowns or a loss of employment which can affect your ability to service your debt.
If you don't have the funds to pay for the expenses that arise from these situations, a personal loan or credit card can seem like a good option.
First, you may be able to get a lower interest rate on your consolidation loan than you were paying on your various other debts.