Consolidation loans are available to most students who have more than one loan. You are eligible to apply for a student consolidation loan if you are in school, grace period, repayment or, in some cases, even if you are in default.

There are some downsides to getting a student consolidation loan. Once you consolidate, your interest rate is fixed. The fixed rate is based on the weighted average of the interest rates on the loans at the time you consolidate, rounded up to the nearest one-eighth of a percent. The interest rate does not exceed 8.25 percent. Even if interest rates drop, your loan rate will remain the same.

Another disadvantage is that, if you are eligible for loan discharge under the Federal discharge program, you will no longer eligible for these discharges. For example, if you have a $5000 Perkins loan and a $500 Stafford loan and you want to get a discharge under a Perkins discharge program, if you consolidate these loans together, your Perkins loan is no longer a Perkins loan and you would not be eligible for the discharge.

To see if you are eligible for student loan consolidation, contact any student loan consolidation company or your current lender.