If you can reduce the number of checks you have to write each month, and get a smaller payment at the same time, isn't a consolidation loan the way to go? First of all, when someone is deeply enough in debt that they are even thinking about doing a consolidation loan, having to write fewer checks each month shouldn't even be a consideration. It generally takes years to get deeply into debt, so it is only fair to expect it to take a few years to get out.If you are seriously considering a consolidation loan so you don't have to write so many checks and make so many payments, then you are a long way from actually dealing with, and solving, the debt problem. Your debt problem is not being caused by having to spend time writing checks each month. You can consolidate all, just some, or even just one of your student loans.Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.
Even if you reduce your monthly debt payment to writing only one check each month, these other problems are still there.The principal reason is you will have a new inquiry and huge installment loan appear on your credit report, even though you also will have much lower debt-to-credit ratios on your credit cards.The potential underwriting risk that you present to a new lender is measured in conjunction with your credit score and will now have to incorporate that you have the chance to begin adding to your credit card balances again.The cliche about rearranging the deck chairs on the Titanic came to mind when I read your question.Debt consolidation won't address the real problems that may sink your credit rating!I couldn't even count how many times I've spoken with people who want to use consolidation loans to deal with their debt problems. Therefore, a consolidation loan means taking all of your debts and using a loan to combine them into one big debt.