If you answered “yes” to all of these, you might want to look into consolidating your loans.If you’re more concerned about lowering your interest rate, private student loan consolidation, or refinancing, might be the better option for you.
According to the Department of Education, you cannot consolidate a loan with the federal government that’s already been consolidated, unless you add on an additional, existing eligible loan or loans.
You can refinance loans with private lenders as often as you would like.
Refinancing your loans can lower your interest rate and your monthly payment.
Federal loan consolidation can lower your monthly payment if you extend your loan term, but stretching out payments over a longer time period without an interest rate reduction can increase overall repayment costs.
If you have federal student loans and a) have too many different payments to keep track off or b) would like to qualify for different repayment plans like income-driven repayment or Public Service Loan Forgiveness, consolidation might be a good idea!
Consolidating your federal loans will give you the opportunity to consolidate multiple loans into one (lower) monthly payment, and also let you choose a new repayment term and repayment plan.
You can’t consolidate private loans in the federal Direct Consolidation Loan program, but some private lenders allow you to consolidate federal and private loans together.
The Direct Consolidation Loan program is the right choice if your goal is to simplify the process and keep your options open for the many repayment plans available for federal loans. Your rate is determined by the weighted average of the interest on the loans being consolidated rounded up to the nearest one-eighth of 1%.
If the requirements above sound good, we think that you are a great applicant for student loan refinancing and consolidation.