Consolidating your student loans is a way to save money while providing you with a more manageable budget. Who benefits most from student loan consolidation? Those with several loans through different lenders.

Consolidating does not imply financial weakness or an inability to repay the loan. In fact, many will choose this route simply to avoid keeping track of several different accounts.

Rolling all of your loans into one allows you to make a single payment each month. It also means you will be less likely to suffer lower credit scores because of a late or missed payment. This way, even if you have no financial difficulty making payments, there is no need to keep track of each loan separately.

For those who do have financial difficulties or concerns, consolidation addresses some of these issues. As the borrower, it is important to determine what your monthly payments would be before and after consolidation. If a monthly budget is of concern to you and consolidating lowers your payments, this can make repayment more affordable for you. In some instances your monthly payments may be reduced by as much as 50 percent.

Not all consolidation offers will automatically mean lower payments, however, so it is important to make these calculations and compare them before deciding on a course of action.

Whether or not you decide to consolidate student loans should depend on the benefits available to you. In some cases student loan consolidation might not be needed. This can be for any number of reasons, including:

• Your loan debt is not spread out over many individual loans
• You have no difficulty making your monthly payments
• Your current interest rate is lower than the rate offered through consolidation

While there are cases where it is not absolutely necessary, more often than not consolidation can make life a lot easier.

See also: Isn't a student loan consolidation the same as getting another loan?

Consolidating student loan debt can also extend the length of the repayment period. By doing so, you will have a longer window in which to repay the loan. Depending on how much you have borrowed to finance your education or that of your child, it might be difficult to repay the entire amount in the initial period offered. Factoring in a personal budget is a good way to determine how long you might need for repayment, thus influencing how you choose to consolidate.

In extending your loan repayment period you will be extending the amount of time available for interest to accrue. This is where the other key benefit to consolidation comes in. You want to choose a package that lowers your interest rate from what it was at the time you received the loan.

It is common knowledge that getting the lowest rate is what can save you money in the long run. Interest rates can fluctuate, so it is important to keep an eye on any current trends. Consolidating student loans will lock in the current rate for the remainder of the repayment. If the rates are expected to drop it might be more beneficial to wait until they do before refinancing. However, if all things point toward an increase, you can save money by locking in the present and lower interest rate.

Borrower benefits are another important factor used to determine the pros and cons of consolidating. Lenders will offer packages that come with certain stipulations, such as rate reductions after a certain number of consecutive payments are made on time.

Others offer savings if you enroll in automatic debit payments every month. In some cases, the loan company might even forgive a percentage of the entire principal loan, relieving the borrower of any obligation to repay that portion of the loan.

For these reasons it is essential to compare all aspects of student loan consolidation offers, then weigh that offer against what your situation would be without consolidating. Whichever option can save the most money or provide an affordable monthly budget will determine the smartest consolidation plan for you.