There is one way you can borrow money from the government for a consolidation loan. If you have student loans there is a federal government program to consolidate those loans into a single loan. This program allows students to lock in an interest rate for their student loans. Normally this interest rate fluxuates. By locking it, former students get a fixed payment amount.
One of the advantages of using the federal consolidation program is having fewer loans showup on your credit rating report. Not all federal consolidation companies report to credit bureaus. There is also the advantage of having a simplified structure although there may be some physicological advantages to having serveral smaller debts that can be paid off on at a time.
The private companies that handle federal student loan consolidation receive substities from the government which is why their interest rates are often below the normal market interest rates. This helps students pay off their loans but has other effects on the economy that may be less desirable.
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