Borrowing money is a very tricky business and it is what keeps the American economy flowing. If you have an outstanding student loan, then you are part of the flow. Say you have multiple student loans from undergrad and graduate studies, you can certainly consolidate all your student loans into a more manageable payment amount.
But what happens after you consolidate your student loans? What if the rates drop or you want to pick up another degree and manage those associated costs? How many times can you consolidate your student loans?
The parameters are capped to none if you are trying to consolidate a federal loan. Regardless of whether or not you are trying to get the money from the loan originator or a new lending institution. For federal guidelines, prevent the consolidation of your student loans with the same lender or a different lender.
Of course there are some exceptions to these rules as to how many times you can consolidate a student loan. Once you are no longer a full-time student you can get new federal loans and consolidate older loans with new federal loans to whichever lender you choose. Additionally, additional loans that weren’t included in the original consolidation can be combined to make a new student consolidation loan.
Student loans do not operate like other loans, they have rules that are unique to their own situation. For example, with mortgages, if the rates drop, then mortgage holders can research and refinance their loan at any given time. However, student loan consolidation rules are different because once you lock into a rate, you are stuck.
Since the options to consolidating student loans are limited to one, it is imperative that those in the process of consolidation research every possible avenue and source to help ensure they get the best rate possible the first time around. If ever you curse the situation you got locked into, just remember what your money paid for.