Federal loan borrowers can also lower their monthly payments by extending the life of their loan, having their payments capped according to their income and by having their debt dismissed after making 25 years of consecutive payments under the income-based repayment plan.

But borrower protections and repayment options on private consolidation loans can vary wildly from lender to lender.

Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.

One major advantage of federal consolidation loans is that borrowers don't need a stellar credit score to qualify, they can apply any time (even if their loan is in default) at Loan gov, and they'll always get a fixed interest rate.

While loan consolidation can sometimes dramatically lower a borrower's monthly payments, Kevin Walker, co-founder of the college finance site Simple Tuition.com, says it can also cost you."The downside of getting a lower monthly payment is that you're going to subject yourself to substantially more interest charges over the life of the loan," he says.

The silver lining is that all federal consolidation loans and some private ones don't have prepayment penalties. " Bankrate's community sharing policy Bankrate wants to hear from you and encourages thoughtful and constructive comments.

Borrowers should have loan account numbers, estimated payoff dates and contact information for each of their loans' holders ready.

Those seeking consolidation should also review their repayment options at Student gov, so they're prepared to pick the proper repayment plan.

Regardless of how the market fluctuates, borrowers will never pay more than 8.25 percent on their consolidation loans.

Private loans can typically only be consolidated with other private loans.

This can be attractive to borrowers because the consolidation frequently results in longer repayment periods and lower monthly payments.