Student loan debt is the price many students pay for getting a great education at a fine higher educational institution. To be sure, attending college and graduate school can pay dividends for the rest of one’s life: a good education can contribute to higher earnings potential, a wider network of friends, and a broad base of knowledge that can enrich one’s life in innumerable ways.

That is why debt is something that students consciously choose to take on: nobody is forced to take out a student loan. Rather, most students who take out loans realize that this is their best opportunity to get the money they need to pay for college.

In fact, many students end up taking out multiple student loans during their undergraduate or graduate college careers. Sometimes, one loan is just not enough to fund one’s education.

The Challenge Of Having Multiple Student Loans

The drawback to having multiple loans is the complexity of paying them back. Having multiple loans means having to make multiple monthly payments to different lenders. It means different interest terms (such as a mixture of variable and fixed-interest rate loans). And, in many cases, it involves having varying repayment schedules (e.g., some at 5 years, some at 10 years).

Consolidation Tips

That is where student loan consolidation comes in. By consolidating your student loans, you are essentially rolling all of your outstanding debt into one single loan. The new loan will have a single interest rate and a single repayment schedule.

Notably, loan consolidation allows grads to potentially lower their monthly payments. This is because the consolidation loan allows them to stretch out their payments over a longer period of time of, say, up to 30 years. Of course, doing so increases the cost of the loan itself since more total interest is paid. But, when payments are too high, sometimes consolidating is the most practical option.

If you are considering national student loan consolidation, here are 5 tips:

1. Decide If Consolidation Is Right For You

You should not consolidate your student loan if: your monthly payments are manageable, you don’t mind making multiple payments to different lenders, you do not currently hold multiple loans, or you do not feel you can get a better interest rate through consolidation.

Otherwise, consolidation is likely right for you.

2. Determine How Much You Can Afford In Monthly Payments

You will want to start by having a close look at your current monthly expenses. Figure out how much you can realistically afford in student loan payments each month. Write this figure down – it will come in handy soon.

3. Figure Out Your Ideal Repayment Period

Now that you know what you can afford to pay, use an online loan calculator to plug in different repayment schedules of, for example, 15, 20, 25 and 30 years. See which one gives you the payments you are looking for.

4. Check Out Lenders’ Terms And Conditions

Research and check the terms and conditions of at least 5 lenders.

5. Apply

Then, contact at least 3 of the lenders you researched and apply to each one for a consolidation loan. See which lender offers you the best terms, and you are on your way to lower monthly payments!

By consolidating over a longer repayment period, you will enjoy lower monthly payments and the simplicity that comes with only having to deal with a single lender.

The first option available is a home equity line of credit, which is exclusive to those who are already home owners. The equity that you have in your home is defined as the difference between the current fair market value of the home versus the amount left to pay off on the mortgage. Say for example, you have a house currently worth $100,000, and owe $70,000 on your mortgage. This would mean that you have $30,000 worth of equity in your house, which a bank would then be willing to lend you a portion of (usually up to 80 percent). Based on the amount of equity you have in your home, a home equity line of credit may be an excellent debt consolidation option. For example, payments per month on $25,000 worth of credit cards can easily be more than $500, while the payment on a home equity line of credit may be considerably less, perhaps $100-200 per month depending on the associated interest rate. One important factor to keep in mind when considering a line of credit is that most banks will require for it to be paid off in a certain amount of time (say 10 years). This would most likely not be feasible if only the minimum payments were made, so plan to be able to adopt a more aggressive pay off strategy.

A second option to be looked at (especially for those who are not home owners) is transferring balances to zero interest credit cards. As stated above, credit card companies make more money the longer an account is open, primarily off the interest you must pay. Based on your credit rating, you may be able to transfer some or all of your balances to lower, or even zero percent, interest rate cards. This will save a ot of money on a month to month basis, as you will be paying off the principle balance directly rather than mostly interest. Be sure to keep an eye on the terms of the card, as the interest may suddenly jump up to outrageous rates after 12 months or so.