Student Loan Hero CEO Andy Josuweit says lowering monthly payments is simply a short-term fix and believes consolidating your loans immediately after you graduate isn't the best idea.
"Consolidation of federal student loans can be a bad idea if you want to pay off your student loans early," Josuweit explains. "By consolidating, the interest rates of all your loans are averaged. You're no longer able to make extra payments that specifically target the student loans with the highest interest rates first, which would save money on interest charges."
Don't automatically jump on this option. Refinancing student loans is a tricky strategy, requiring a ton of number crunching and evaluating.
Meanwhile, income-based repayment programs are designed for borrowers who have a high amount of debt compared to their income.
Make sure you have all the facts on how either of these strategies will affect your personal situation. Then, you can decide if paying more in the long run in return for lower monthly payments is worth it to you.
Your turn: Did any of these myths about student loans surprise you?
Kelly Smith is a junior writer and engagement specialist at The Penny Hoarder and a senior at The University of Tampa. Catch her on Twitter at @keywordkelly.
5 common beliefs about student loans that get an 'F' from experts originally appeared on The Penny Hoarder.
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