Try first to tighten up your budget to free up more dollars to meet your loan payments, or take on a second or better-paying job.
If you’ve managed to pay your nonconsolidated loans on time for close to 48 months, try to hang in there a little longer. Lenders commonly drop the interest rates significantly, say two percent, for borrowers who have paid on time for 48 months (sometimes for only 24 months)
Also check out two options offered by the federal loan program. The income-sensitive repayment option bases monthly payments on your total gross monthly income. Under the graduated payment option, payments start out smaller and increase gradually on the assumption that your earnings will increase. Increased payments cannot exceed three times the amount of the initial payment. Although the total interest you pay will increase under these options versus sticking to the original loan schedule, the increase will be less than that of a consolidation loan.
You may be able to defer, or even outright cancel, a student loan if you teach in a low-income area or you teach full-time in a subject area that’s short of teachers. You also may defer federal student loans if you’re unemployed, return to school, go into the military or become disabled.
The important point is that while consolidation of an education loan may be the right choice for you, there are downsides and alternatives to consider before making a final decision.