Think of consolidation like a student loan taco. (Bear with us here.)

When you get out of school, you could have four or more different educational loans. They could be government loans or private-sector loans, and maybe you took out a new mix each school year. What’s more, the separate loans probably have different repayment terms, interest rates and amounts owed.

Once you get out of school and have to start paying the loans, you could be swamped with bills and paperwork and have difficulty keeping them all straight. One solution is to roll all your individual school loans into one bigger loan, each of them an ingredient in your student loan taco. (We would advise against actually trying to consume your loan taco—at least not without a lot of hot sauce to make it go down.)

Consolidation is tempting for a variety of reasons. Perhaps you want to make one monthly payment instead of tracking many separate expenses. Or maybe you want to lower the total amount you’re paying each month and extend your repayment term – which will increase the total amount you pay back. It could also be you simply hate your lender and want to take your business elsewhere.

It gets more complex if you have both federal loans and private ones. You generally can’t consolidate private loans with federal loans—and it’s usually a bad idea even when your lender allows it. Federal loans have generous terms and incentives to lower the financial barriers to college, and you may forfeit these perks by combining them with private loans. For that reason, many people try to keep their federal and private loans separate when consolidating.

If you want to consolidate, most any lender can help you. But you can only do it once within the lifetime of the loan—unless you are adding another new loan that you haven’t already consolidated into the mix.

Want to Know More?

• Should I Consolidate My Loans?
• Advice for Getting the Best Deal on Loan Consolidation
• Grilling Guide: Questions to Ask Lenders Before Consolidating