Consolidating your debts means your debts get transferred to a single lender.
On the other hand, rehabilitating your defaulted federal student loans, which is another way to get out of default, removes all mention of default from your credit report.If you include a Perkins Loan, for instance, in the consolidation, you’ll lose specific cancellation benefits that are only available from that program.(Learn the pros and cons of federal student loan consolidation.) If you’re in default, you’ll have to meet some requirements before you can consolidate your loans.In theory, consolidating a number of higher-interest loans into one lower-interest loan makes sense.Consolidated loans typically offer lower monthly payments, and making just one payment is simpler.
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You must either: You can’t consolidate a defaulted loan that’s being collected through a wage garnishment or in accordance with a court order after a judgment is entered against you unless the garnishment order is lifted or the judgment is vacated.