The first thing you are going to want to do is sit down and document exactly how much you owe in student loans, what interest rate you are paying, and who you have the outstanding student loans with. Armed with that information you will then want to decide if you are better off consolidating your student loans through the government or through a private financial institution.

This decision will of course, come down to two factors: Who offers the lowest interest rate and who has the quickest time-frame in which to get the loan paid off in full. You simply want to determine which option best suits your financial needs. Another advantage of consolidating student loans is that you will now have one payment instead of several and that will make it much easier to manage. You can even have the monthly payment deducted directly from your checking account. And I’m all for making life easier.

Stafford Loan

Will start off with the federal loan consolidation option which is known as a Stafford loan. You can consolidate all of your previous loans into one loan under the Stafford program and lock in a fixed interest rate. Anyone can qualify for a Stafford loan as long as they have not previously defaulted on a student loan. You can apply online through the Stafford loan website and you will get a response in a timely manner.

Next Student

Next Student is a private financial services company that will either take on your fixed rate student loans consolidation themselves or locate another company for you to work with. It is important to realize that in many cases private companies will be more expensive than consolidating through the federal government, even on fixed rate loans because they charge fees. Remember that private companies are in business to make a profit.

You must understand that with all things financial your credit history will have a lot to say about how much you will pay in interest. If you have negative marks on your credit record and a comparatively low fico score then you can bet you will be paying higher interest rates on student loans consolidation. If your credit ratings should improve then you always have the option to refinance and lock in more favorable interest rates.