Let’s be very clear: In almost every case, you shouldn’t mix your federal and private loans. If you consolidate private and federal loans together with a new higher rate, you’ll lose the advantage of the lower, fixed rate on your federal loans. Private lenders, on the other hand, will stick you with a less secure, variable rate.

Here are some other tips to help you make the wisest decision:

Keep your Perkins loan separate
If you consolidate, be aware that merging your Perkins loan with other loans is a bad idea. By law, a Perkins loan loses certain benefits when it is consolidated. For example, if you consolidate your Perkins loan before its nine-month, non-payment grace period is up, you will miss out on months of interest-free deferment.

If you go on to graduate school or have trouble finding employment after graduation, you can defer payment interest-free on your Perkins for up to three years. When consolidated, the Perkins loses this benefit.

If you’re merely looking to stretch out repayment, try other options
Before leaping to consolidate your private loans and taking on additional fees or increased rates, call your current lenders and see if they will extend your repayment schedules. If lowering your monthly payments is your only reason for consolidating, your lenders will likely work with you to extend the terms of your current loans. After all, if you go elsewhere and consolidate, they’ll lose your business. Invariably, extending the terms of your loans will mean higher total interest paid.

Consider the timing of consolidation
You can consolidate during the grace period before you have to make your first payment, or once you have entered repayment. For those with fixed-rate loans, it doesn’t matter when you consolidate. But for those graduating with the old variable-rate loans, it is better to consolidate before the grace period expires.

There are two rates you can lock in when you consolidate these old loans. There’s the in-school/grace-period rate and the repayment rate. In 2007, the in-school/grace period rate on a Stafford was 6.62% and the repayment rate was 7.22%. That three-fifths percentage point could add up to a substantial amount over the life of your loan. If you have variable-interest federal loans, it’s best to lock in the lower grace-period rate.

Want to Know More?

• What is Student Loan Consolidation?
• Should I Consolidate My Loans?
• Grilling Guide: Questions to Ask Lenders Before Consolidating