Millions of college graduates have student loan debt after they leave school. In the United States alone, there are over $1.5 trillion dollars in student loan debt owed by 44 million borrowers. That’s a staggering number and it’s only growing as the cost of education rises. As you’ve been making payments and started working, you may be wondering if consolidating all of your loans into one single payment is a good move financially. Take a look at the breakdown below to see if it’s the right move for you.

When you have multiple student loans

In some cases, you may have multiple federal and private students loans with different loan services or private banks. It’s important to note that you can’t combine your federal and private students loans together. Your federal loans are through the U.S. Department of Education and paid through a student loan servicer. Your private student loans are through a bank or multiple banks.

If you want to consolidate your federal student loans, this can typically be done pretty easily through your loan servicer. The idea here is that you roll all of your loans into one and just pay one payment. You may also be able to combine a couple of loans and the loan servicer will disperse one payment across all of your loans. This will mean less work for you and typically some improvements on your credit. Talk with your loan providers to see all of your options.

It can be a little tricker to consolidate your private student loans. You may have them through different banks so this process will require you to take out a completely new loan which encompasses all of the debt. The new loan will pay off all of your existing debt at the various banks. You’ll then just have one large loan to one private bank. If you have a couple of loans through one bank, this process is typically a lot easier. You can remain with the same bank and they will take care of closing the existing loans and setting up your own larger loan.

What consolidating student loans means for your credit score

If you’re wondering whether this would help you financially or help your credit score there are a few things to consider. First, making multiple payments to different banks and services can be confusing and a hassle. If nothing else, if you have trouble keeping track of your finances, streamlining this may just help ensure that you don’t miss a payment. Staying on top of your loan payments is essential and having as little as possible will be easier to manage. Second, having less debt will help boost your credit score. Although the amount of debt won’t necessarily go down, you will have fewer creditors and fewer accounts on your credit. By consolidating you will hopefully only have one or two student loan accounts on your credit. Your other accounts will then show a balance of zero and after seven years, they will fall off your report all together. All of these factors will lead to an increase in your score.

To determine if this will help you, think about how much debt you have, how many different banks or providers you have and how many loans you have with each. If this amount if overwhelming and you have multiple at each, consolidation is probably a good idea. If for no other reason than to streamline your finances and make sure you don’t miss a payment. Next, examine which loans are with who and start with the lowest hanging fruit. The loans with the U.S. Department of Education are going to be the easiest to combine. If you have private loans, staying with your existing bank may be easier but shop around and see if there are better interest rates out there. Once you have your loans down to one or two payments, you’ll have better peace of mine, more financial freedom and a better credit score in the long run.