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If you’re looking to save on your student loans, compare your options with the best student loan consolidation companies below.

We vetted each lender in 33 areas within four major categories — legal compliance & financial stability, breadth of product coverage, product attributes, and customer experience — to bring you this list of the best student loan refinancing companies.

Compare the Best Student Loan Consolidation Companies

Rates and terms

Credible’s Picks
Advantage Educational Loan
Brazos
citizens bank student loan review
Connext
EDvestinU
iHELP
MEFA
RISLA
Credible’s Picks
Advantage Educational Loan
Brazos
citizens bank student loan review
Connext
EDvestinU
iHELP
MEFA
RISLA
Rates From (Variable / Fixed)
- / 4.34%
2.83% / 3.15%
2.88%¹ / 3.50%¹
2.50% / 3.25%
3.97% / 4.25%
4.62% / 4.69%
3.94% / 4.65%
4.68% / 4.95%
N/A / 3.49%
Fixed Rates
4.34%
3.15%
3.50%¹
3.25%
4.25%
4.69%
4.65%
4.95%
3.49%
Variable Rates
-
2.83%
2.88%¹
2.50%
3.97%
4.62%
3.94%
4.68%
N/A
Loan Terms
10, 15, 20
5, 7, 10, 15, 20
5, 10, 15, 20¹
5, 7, 10, 12, 15
5, 10, 15, 20
10, 15, 20
10, 15, 20
15
5, 10 ,15
Compare Rates

Loan details

Credible’s Picks
Advantage Educational Loan
Brazos
citizens bank student loan review
Connext
EDvestinU
iHELP
MEFA
RISLA
Minimum Lending Amount
$7,500
$10,000
$10,000
$5,000
$10,000
$7,500
$10,000
$10,000
$7,500
Maximum Lending Amount
No max
$150K undergrad, $250K graduate degrees
$90K for Bachelor's or Associate, up to $350K for other degrees
$150K for Bachelor's or Associate, up to $250K for other degrees
$250K
$200K
$250K
No max
$100K for Bachelor's or Associate, up to $300K for other degrees
Auto-Pay Interest Rate Reduction
Yes0.50%
Yes0.25%
Yes0.25%
Yes0.25%
Yes0.25%
Yes0.25%
Yes0.25%
Interest-Only Payment Option
Death Discharge
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Loan details, continued

Credible’s Picks
Advantage Educational Loan
Brazos
citizens bank student loan review
Connext
EDvestinU
iHELP
MEFA
RISLA
Origination Fees
None
None
None
None
None
None
None
None
None
Prepayment Penalty
None
None
None
None
None
None
None
None
None
Refinance Parent PLUS Loans
Parent PLUS Transfer From Parent to Grad
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Eligibility

Credible’s Picks
Advantage Educational Loan
Brazos
citizens bank student loan review
Connext
EDvestinU
iHELP
MEFA
RISLA
Eligible Degree Types
DNG, Undergraduate, and Graduate
Undergraduate and Graduate
DNG, Undergraduate, and Graduate
Undergraduate and Graduate
Undergraduate and Graduate
DNG, Undergraduate, and Graduate
Undergraduate and Graduate
DNG, Undergraduate, and Graduate
Undergraduate and Graduate
Eligible Loans
Private and Federal
Private and Federal
Private and Federal
Private and Federal
Private and Federal
Private and Federal
Private and Federal
Private and Federal
Private and Federal
Ability to Apply with a Cosigner
State Residency
AL, AR, AZ, CO, CN, FL, GA, HI, IN, KS, KY, LA, MO, MS, NC, NE, NM, OH, OK, PA, SC, TN, TX, UT, VA, WI, WV, and WY
Texas
Any state
Any state
Any state
Any state
Any state
Any state
Any state
Compare Rates

Eligibility, continued

Credible’s Picks
Advantage Educational Loan
Brazos
citizens bank student loan review
Connext
EDvestinU
iHELP
MEFA
RISLA
Cosigner Release Option
Ability to Apply While Enrolled in School
Minimum Required GPA
No minimum
No minimum
No minimum
No minimum
No minimum
No minimum
No minimum
No minimum
No minimum
Compare Rates

Ready to start saving?

Credible simplifies student loan refinancing by letting you compare rates from top lenders in minutes. Check your rates today to see how much you could save.

Check Your Rates Now

 

Lender Reviews

Keep reading for more details about the top student loan refinancing lenders below.

Lender Overview

3.50%¹
Fixed Rates
2.88%¹
Variable Rates
5, 10, 15, 20¹
Loan Terms

Loan Details

$10,000
Minimum Lending Amount
$90K for Bachelor's or Associate, up to $350K for other degrees
Maximum Lending Amount
0.25%
Auto-Pay Interest Rate Reduction Amount

Citizens Bank Student Loan Refinancing

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The basics

Citizens Bank offers great refinancing rates to many borrowers, with the lowest variable rate offered on Credible’s platform and among the lowest fixed rates. Citizens refinances both undergraduate and graduate student loan debt, as well as loans that parents may have taken out on behalf of their children.

Refinanced loan terms with Citizens are five, 10, 15, and 20 years, so you’ll have the flexibility to choose should you be approved to refinance.

Eligibility

Borrowers must:

  • Have loans that are in repayment
  • Not be currently enrolled in school; borrowers with verified graduate degrees may apply while in their grace period, while graduates with bachelor’s degrees must have made at least three on-time payments, and those who have not earned a degree must show proof of twelve on-time payments
  • Have at least $10,000 in loans to refinance, and no more than $90,000 for bachelor’s degrees, $225,000 for graduate and doctoral degrees, and $300,000 for professional degrees, including law, dentistry, and medicine
  • Be U.S. citizens, permanent residents or resident aliens — resident aliens must have a co-signer who is a citizen or permanent resident
  • Not refinance federal loans that are currently on an income-driven repayment plan

Benefits of Citizens Bank

  • Refinance without a degree: Unlike some lenders, Citizens offers refinancing to some borrowers who have not completed their bachelor’s degree. If you have stopped attending school and do not plan to complete your degree, you are eligible to apply for refinancing through Citizens after making twelve full, on-time payments
  • Forbearance options: Citizens borrowers who meet the eligibility requirements and are struggling to make their monthly payments can opt for up to twelve months of forbearance (which essentially puts your payments on hold for a set number of months)
  • Pay off your loans early with pre-payment: Got extra money to pay down your loans sooner? Citizens does not charge any fees for extra payments (or even for paying off your loan entirely!)
  • Interest rate discounts: Citizens offers interest rate discounts of up to 0.5% to borrowers fulfilling specific criteria. Borrowers who have a pre-existing Citizens Bank account when they apply (co-signers’ accounts also qualify) can earn a 0.25% ‘Loyalty Discount’, and those who set up auto-pay get a 0.25% interest rate reduction

Things to consider

  • You can’t refinance while you’re still in school: While you don’t need a degree in order to refinance with Citizens, you cannot do so if you’re still in school. Some lenders will allow you to refinance before you graduate from school, meaning you’ll start saving on monthly payments and interest as soon as possible, but Citizens requires you to have graduated (or have stopped going to school) before you can refinance
  • Fewer loan options than some newer lenders: Being an older, more established bank, Citizens doesn’t offer some features that some startup lenders have incorporated into their offerings. Some newer lenders allow you to, for example, choose your exact loan term and monthly payment amount or donate money to a nonprofit. Citizens Bank has instead chosen to offer the standard term options available from most refinancing lenders

Is Citizens Bank the right lender for you? Learn more here.

Lender Overview

3.25%
Fixed Rates
2.50%
Variable Rates
5, 7, 10, 12, 15
Loan Terms

Loan Details

$5,000
Minimum Lending Amount
$150K for Bachelor's or Associate, up to $250K for other degrees
Maximum Lending Amount
0.25%
Auto-Pay Interest Rate Reduction Amount

College Ave Student Loan Refinancing

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The basics

College Ave helps borrowers refinance existing federal or private student loans, or borrow a new private student loan to cover their college costs. College Ave offers borrowers great interest rates, as well as a variety of terms and repayment options, so each borrower can find the right fit for them.

With College Ave, borrowers can reduce the total cost of their existing student loans, current monthly payment, or both by refinancing or consolidating existing federal, private, and Parent PLUS loans.

Eligibility

In order to qualify to refinance their loans with College Ave, borrowers must:

  • Be US residents and have attended an eligible school
  • Have a combined total household income of at least $75,000, or add a cosigner
  • Have a bachelor’s degree or higher

If you think you may not qualify to refinance with College Ave on your own, consider adding a creditworthy co-signer. Applying with a co-signer can help you increase your chance of qualifying for refinancing, and could also help you get a better interest rate than you would get if you applied by yourself.

Remember though, that your co-borrower will be responsible for the loan balance if, for whatever reason, you are unable to repay it.

Benefits of College Ave

  • Quick application process: College Ave will pull all your existing loan information from your credit report, so you don’t need to find the paperwork on your servicer’s website, making the refinancing application process quicker and easier
  • Flexible repayment terms: With College Ave, borrowers can choose the loan repayment term that works best for them, as long as it’s between five and 15 years. For instance, a three year term might mean your monthly payments are too high, but a 10 year term would extend your repayment period for too long, bringing up your interest. In that case, a seven-year term could bring a more manageable monthly payment, while still ensuring you pay off your loans in under 10 years. Remember, though, that no matter which lender you go with, you can always pay more than your required monthly payment and pay off your loans faster
  • Set it and forget it: If you want to avoid the hassle of remembering to make your monthly payments, setting up auto-pay can be a great option. And College Ave will even reward borrowers who opt for auto pay with a 0.25% discount on their interest rate
  • Fee free: College Ave doesn’t charge any origination fees, pre-payment fees, or fees for paying more than the minimum amount due each month, which is great news for those who are able and want to pay off their loans faster

Things to consider

  • High interest rates: While College Ave provides very competitive interest rates for creditworthy borrowers, even lower rates may be available to borrowers through other lenders. Comparing prequalified rates from College Ave and other lenders can help you find the absolute lowest rate available

Is College Ave the right lender for you? Learn more here.

Lender Overview

4.25%
Fixed Rates
3.97%
Variable Rates
5, 10, 15, 20
Loan Terms

Loan Details

$10,000
Minimum Lending Amount
$250K
Maximum Lending Amount
0.25%
Auto-Pay Interest Rate Reduction Amount

Connext Student Loan Refinancing

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The basics

In August 2016 ReliaMax, a platform and service provider for student loans, introduced Connext, its private student loan solution, which aims to help students find lenders to refinance their student loans or issue them new undergraduate or graduate student loans.

However, what sets Connext apart from other lenders is that it helps connect students with smaller regional banks and alternative lenders.

Eligibility

Borrowers must:

  • Be US citizens or permanent residents, or have a cosigner that meets those requirements
  • Have graduated from an eligible school or be planning to attend an eligible school
  • Have met Connext’s credit requirements, or have a cosigner that meets the credit requirements

Benefits of Connext

  • Choose from a variety of loan term options: Connext offers up to seven choices for refinancing loans ranging from 5 to 20 years for variable rate loans and between 5 and 15 year terms for fixed-rate loans
  • No fees to worry about: Connext does not charge loan origination fees or prepayment penalties
  • Smaller lenders might mean better loan terms: Connext helps to connect borrowers to smaller banks and lenders, which might help borrowers get better loan options or interest rate deals
  • Dedicated support per borrower: When you choose to refinance your loan(s) with Connext, you’ll be assigned a dedicated advisor who will support you through the process and be on hand to answer any questions you might have

Things to consider

  • A relatively new service: Connext is a new entrant to the student loan scene, and has only been offering student loans and student loan refinance since 2016, making them less established than some other lenders

Lender Overview

4.69%
Fixed Rates
4.62%
Variable Rates
10, 15, 20
Loan Terms

Loan Details

$7,500
Minimum Lending Amount
$200K
Maximum Lending Amount
0.25%
Auto-Pay Interest Rate Reduction Amount

EDvestinU Student Loan Refinancing

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The basics

EdvestinU is not like other lenders — whereas most other lenders are typically for-profit banks or credit unions, EdvestinU is a non-profit lending program offered by the New Hampshire Higher Education Loan Corporation.

And what’s more, proceeds from the EDvestinU Loan Programs support scholarships and college access activities in New Hampshire’s public high schools. Win-win.

Eligibility

Borrowers must:

  • Be U.S. citizens or permanent residents (or be international students with a creditworthy U.S. citizen or permanent resident cosigner)
  • Be enrolled at least half–time at a U.S.–based, Title IV, degree–granting college or university
  • Be at least 18 years old
  • Have federal and/or private student loans (between $7,500 and $200,000) used to attend a Title IV institution

Benefits of EdVestinU

  • A variety of loan terms to suit your needs: EdvestinU lets borrowers choose between four different term lengths — 5, 10, 15 or 20 years. This gives borrowers the option to tailor their loan and choose the term that’s right for their individual financial situation
  • A lender that gives back to the community: Unlike for-profit banks, proceeds from the EDvestinU Loan Programs go right into supporting local New Hampshire public high schools
  • Refinance before you graduate: EdvestinU is one of the few lenders out there that lets borrowers refinance their loans before they have graduated. EdvestinU does not require borrowers to have obtained any minimum level of degree in order to qualify to refinance their loans
  • Autopay discount: Borrowers can get a 0.25% discount when they set up autopay
  • Option to make pre-payments: EdvestinU charges no fees or penalties for prepaying your loan

Things to consider

  • EdvestinU requires a strict minimum income: Borrowers must meet certain minimum income requirements in order to qualify to refinance their loans with EDvestinU. For loan balances below $100,000, EDvestinU borrowers or cosigners must meet a minimum gross income requirement of $30,000. For balances above $100,000, the minimum income is $50,000
  • No grace period on repayment: While EdvestinU does not require borrowers to meet any degree requirements, students who refinance their loans while still in school should keep in mind that they will not be able to take advantage of any grace period. This means that they will be responsible for beginning repayment as soon as their funds are disbursed

Is EdVestinU the right lender for you? Learn more here.

Lender Overview

4.65%
Fixed Rates
3.94%
Variable Rates
10, 15, 20
Loan Terms

Loan Details

$10,000
Minimum Lending Amount
$250K
Maximum Lending Amount
Auto-Pay Interest Rate Reduction Amount

iHelp Student Loan Refinancing

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The basics

If you’re a community minded borrower looking to get some help with your student loans, iHelp might be a good fit for you.

iHelp partners with thousands of community banks nationwide and, when you refinance your loans with them, helps bring your dollars back to the local community.

With iHelp, borrowers can support smaller, local banks, while also taking advantage of the help and support that iHelp can offer.

Eligibility

Borrowers must:

  • Be a citizen or permanent resident of the U.S.
  • Have graduated from an eligible school
  • Be of legal age in their state of residence
  • Meet iHelp’s “creditworthy” requirements, including having an annual income of at least $24,000 for the past two years and a debt-to-income ratio of less than 45%
  • Refinance a minimum of $10,000, up to a maximum of $150,000 for undergraduate education and maximum $250,000 for graduate education

Benefits of iHelp

  • Let your cosigner off the hook: If you think that iHelp is the lender for you, but you don’t meet their income or other eligibility requirements, adding a co-signer could help. Adding a creditworthy cosigner can help you qualify for offers you might not qualify for by yourself. But cosigning a loan is a big responsibility — iHelp offers borrowers the option to release their cosigners from obligation after two years. The primary borrower must also meet certain credit requirements before cosigner release can be granted, including a minimum income and credit score, and a maximum debt-to-income ratio
  • Multiple repayment options: iHelp borrowers can request interest-only payments for up to 24 months. Alternately, borrowers may select ‘graduated’ repayment, which starts with interest-only payments for a set time period, then slowly increases until the borrower is making his or her full payment amount

Things to consider

  • Better for borrowers with low credit: iHelp offers its borrowers a number of great benefits, but if you’re someone with a great credit score, you might stand to get even better interest rates with other lenders. While rates from other lenders start at close to 2% for those with good credit, iHelp’s rates start at closer to 4%
  • Fewer student loan term options: iHelp offers only three different terms for student loan refinancing — 10-year fixed, 15-year fixed, and 20-year variable. If you’re planning to pay off your loans over a shorter period of time, you may be better off looking elsewhere

Is iHelp the right lender for you? Learn more here.

Lender Overview

4.95%
Fixed Rates
4.68%
Variable Rates
15
Loan Terms

Loan Details

$10,000
Minimum Lending Amount
No max
Maximum Lending Amount
Auto-Pay Interest Rate Reduction Amount

MEFA Student Loan Refinancing

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The basics

MEFA (which stands for the Massachusetts Educational Financing Authority) offers student loan refinancing to borrowers, regardless of where they live or are attending school. However, you have to be a Massachusetts resident or attend a college in the state, if you want to take out a new loan with MEFA.

MEFA loans have a number of limitations as compared to other lenders, such as limited loan term options, and a lack of benefits such as deferment or forbearance options. While MEFA could still be the right lender for you, it’s important to educate yourself before you dive in.

Eligibility

Borrowers must:

  • Have loans that are in repayment and current (i.e they are not in deferment, forbearance, or a grace period)
  • Refinance a minimum of $10,000
  • Be a U.S. citizen or permanent resident
  • Have an established credit history (your cosigner can fulfill this requirement if you do not)
  • Not have a history of student loan default, bankruptcy, or foreclosure in the past 60 months
  • HBe the primary borrower on the loans you wish to refinance
  • Have used the loan to finance an education at an eligible college

Benefits of MEFA

  • Lower monthly payments: MEFA strives to offer borrowers lower monthly payments than they would get with other lenders. The average MEFA borrower pays $191 less per month than before they refinanced. MEFA also has no maximum loan balance, so you can refinance your total loan balance with MEFA as long as you meet their eligibility requirements
  • Refinance without graduating: MEFA’s eligibility requirements do not include having completed a degree, so if you haven’t graduated but you still need help refinancing your loans, MEFA could be the lender for you

Things to consider

  • Limited borrower benefits: MEFA might offer you lower monthly payments, but it doesn’t offer options such as deferment, forbearance, or co-signer release. This could be tough to swallow for borrowers if they ever find themselves financially unable to handle their loan payments. While MEFA borrowers can apply to refinance with a creditworthy co-signer, it’s best to think twice before doing so — MEFA does not offer co-signer release, so co-signers will be legally tied to the loan until it is fully repaid
  • Just one repayment term option: MEFA borrowers must be prepared to deal with a 15-year loan term, since that’s the only option MEFA offers. Borrowers can choose whether they want a fixed or variable interest rate on their 15-year term

Is MEFA the right lender for you? Learn more here.

Lender Overview

3.49%
Fixed Rates
N/A
Variable Rates
5, 10 ,15
Loan Terms

Loan Details

$7,500
Minimum Lending Amount
$100K for Bachelor's or Associate, up to $300K for other degrees
Maximum Lending Amount
0.25%
Auto-Pay Interest Rate Reduction Amount

RISLA Student Loan Refinancing

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The basics

The Rhode Island Student Loan Authority, or RISLA, is a non-profit state organization that offers not only student loans and student loan refinancing, but also resources such as college planning services, an internship finder, and a scholarship search.

Any qualifying borrower can refinance with RISLA, but you must be a Rhode Island resident or go to school in the state to take out a private student loan for college.

Eligibility

Borrowers must:

  • Apply to refinance private education loans, parent PLUS loans, Stafford loans, and subsidized and unsubsidized direct student loans (but not Perkins loans)
  • Be the primary borrower or cosigner on the loan
  • Apply to refinance a minimum of $7,500
  • Meet savings and debt-to-income requirements
  • Pass a credit check and make at least $40,000 per year (combined if the primary borrower and co-signer live together, $40,000 each if they live separately)

Benefits of RISLA

  • Income-based repayment plans: This is a big benefit. Income-based repayment (IBR) plans determine your monthly payment as a percentage of your income, so you never have to pay more than you can afford. Qualifying borrowers will find their monthly payments set at no more than 15% of their monthly discretionary income, and will have any remaining loan balance forgiven after 25 years of repayment. IBR plans can be really helpful if you’re struggling to make your payments each month, but remember, IBR plans stretch out your loan term, which means you’ll end up paying more in interest overall. Also, any income that’s forgiven through an IBR plan is considered taxable income
  • Borrower benefits: RISLA offers its borrowers options like loan forgiveness in the case of death or permanent disability, forbearance for up to 12 months for borrowers who go back to school, and co-signer release after 24 months of on-time payments
  • No degree required: RISLA will refinance loans from any U.S. college, even for borrowers without a degree

Things to consider

  • Limited loan options: If you’re hoping to take advantage of a low interest rate by opting for a variable rate loan, you might want to look elsewhere — RISLA only offers fixed rate loans to its borrowers, as well as a maximum loan term of 15 years
  • Minimum income requirements: Borrowers must have a minimum income of $40,000 per year in order to qualify to refinance their loans with RISLA

Is RISLA the right lender for you? Learn more here.

 

Frequently asked questions about student loan consolidation and refinancing

1. What is student loan consolidation or refinancing?
2. Can I consolidate private and federal loans together?
3. Is student loan refinancing right for me?
4. Should I refinance my student loans with fixed or variable interest rates?
5. How do I consolidate or refinance my student loans?
6. How much can I save by refinancing my student loans?

What is student loan consolidation or refinancing?

As a borrower, it’s important you understand the differences between student loan refinancing and student loan consolidation.

Student loan consolidation: Consolidation is the process of combining your government loans so that you can make a single monthly payment. You can also extend the term of your loan, at the same interest rate.

If you’re concerned about lowering your monthly loan payments, consolidation could be a good option for you. But remember, lowering your monthly payments could mean that you end up paying more in interest overall.

Student loan refinancing: Refinancing is when a student loan lender buys out your existing loans and gives you a single new loan with a potentially lower interest rate. So if you feel like your interest rate is too high, refinancing could help.

This process will also combine all the loans you refinance into one convenient payment. While a lower interest rate is good news, your new loan may not come with all the borrower benefits associated with government loans.

If you’re still confused, think about it like this: consolidation is like getting your house cleaned up and organized, whereas refinancing is like getting a whole new house.

Can I consolidate private and federal loans together?

You cannot consolidate federal and private student loans together into a Federal Direct Consolidation Loan. This is because federal student loans come with certain borrower benefits that you would lose if you chose to refinance federal and private loans together.

For example, borrowers with federal student loans can take advantage of federal income-driven repayment programs, or benefits like loan forgiveness, which borrowers with private student loans typically don’t have access to. If you do decide you want to refinance your federal loans with your private loans, you will have to work with a private lender.

Is student loan refinancing right for me?

If you’ve been making your student loan payments every month, but you still feel like it’s going to take decades to pay everything off, your student loan interest rates might be the problem. 

If you can lower your interest rates, more of your money can be used to reduce your debt, instead of paying off only your interest. Refinancing doesn’t guarantee lower payments, but it could help you get a lower interest rate and enable you to pay off your loan faster.

Remember though, refinancing your federal loans could mean giving up your certain borrower benefits like deferment and forbearance, loan forgiveness, and income-driven repayment plans. Learn more about whether refinancing is right for you.

Should I refinance my student loans with fixed or variable interest rates?

Many college and personal finance advisers recommend that you take advantage of all available financial aid, scholarships, and federal student loans before turning to private lenders. 

This is because federal student loans typically have fixed interest rates, which means your rate will remain the same over the life of your loan. Private student loans usually have variable interest rates, which can change depending on economic conditions.

Fixed interest rates don’t change for the life of your loan, so you’ll always know how much you’re expected to pay. But by opting for a fixed-rate loan, you might be passing up the chance to start out making lower monthly payments.

Variable rates can either work for you or against you. During tough economic times, the Federal Reserve and other central banks can lower interest rates. But if the Fed starts worrying about inflation, policymakers may decide to raise rates to keep prices from rising too sharply.

How do I consolidate or refinance my student loans?

Each refinancing lender determines the rate they’ll offer a borrower on a case-by-case basis, so if you want to take advantage of the lowest interest rate available, it’s best to apply to many different lenders.

Student Loan Consolidation: Private and Federal

For borrowers juggling multiple loan payments, federal student loan consolidation can help them lower their monthly payments, by packaging several debts into a single loan.

Student loan consolidation is often dismissed by borrowers because it can be confusing to understand the process of consolidating student loans.

This section will cover the ins and outs of federal student loan consolidation, including the consolidation application process, and the differences between federal student loan consolidation and student loan refinancing.

Can I refinance a student loan after consolidation?

Generally speaking, you can’t consolidate a loan that’s already been consolidated, unless you add on another existing loan.

However, because refinancing takes place with a private lender and not the federal government, you can refinance a consolidated loan, as long as you refinance the entire amount.

Remember, since you’re refinancing a federal loan with a private lender, you will lose any federal borrower benefits that came with your loan, such as access to income-driven repayment, deferment, or forbearance, which are not always available from private lenders.

Benefits of student loan consolidation

Juggling multiple student loans can be complicated, especially if you’re making payments to different loan servicers. Consolidation might help you simplify your monthly payments, by combining many different loans into a single new loan with new terms.

The tables below illustrate an example of how federal loan consolidation can help you manage multiple student loans, by combining them into a single payment.

Although it might seem that you are getting a lower interest rate, your new rate is actually the weighted average of your previous interest rates, rounded up to the nearest one-eighth of one percent. So unless you’re changing your loan term, your monthly payment and interest charges will be about the same, or slightly higher, after consolidation.

Before consolidation

LOANSBALANCERATE
Loan A$15,0007.9%
Loan B$12,3456.8%
Loan C$56,4334.29%
Total balance: $83,778Weighted average APR: 5.38%

After consolidation

LOANBALANCERATE
A single loan with one monthly payment$83,778 5.38%

Consolidating your loans could mean:

  • Simpler repayment: If you’re having trouble keeping track of multiple payments, consolidating your student loans can make the monthly task of repayment a little easier.
  • Avoiding default: Consolidation could help keep you organized, with fewer payments to worry about, which could help you avoid missing payments.
  • Lower payments: By consolidating your loans, you have the option to extend your loan term and lower your monthly payments. If you’ve been having trouble making your monthly payments, this could be especially beneficial. Just remember that a longer repayment term could mean that you pay more in interest overall.
  • Potentially lower interest rate: If you’ve been good about making your payments and managing your finance, your credit score might have improved since you first took out your loans. If so, you might be eligible for a better interest rate, but only if you consolidate by refinancing with a private lender.
  • Multiple repayment plans: When you consolidate your loans, you have the option to customize some aspects of your loan. For example, you change your loan term. You can also take advantage of a number of different repayment plans, such as the Standard 10-year repayment plan, income-based repayment plans, or a Graduated plan.
  • Consolidate defaulted loans: As an alternative to loan rehabilitation, you may be able to consolidate your defaulted loans into a federal Direct Consolidation Loan if you agree to repay the consolidation loan under an income-driven repayment plan. Contact your loan servicer for more information about loan rehabilitation and consolidation.

Cons of student loan consolidation

While the simpler and potentially lower monthly payments that consolidation offers can be helpful in the short term, there are some longer term costs to keep in mind.

  • Longer repayment term = higher repayment costs: Consolidation gives you the option to lower your monthly payments by extending your loan repayment term. While this may be beneficial if you’re struggling to make your monthly payments, stretching payments out over a longer period of time without an interest rate reduction could mean that you end up paying thousands of dollars in additional interest.
  • Loss of certain repayment plans: Some loans, like PLUS loans taken out by parents, aren’t eligible for the most attractive income-driven repayment programs, like PAYE, REPAYE and IBR. Parent PLUS loans only qualify for income-contingent repayment (ICR), and only if they have been consolidated. So if you consolidate PLUS loans with any other federal loans you have, you will no longer be eligible for repayment plans like PAYE, REPAYE, and IBR.
  • One shot only: Typically, you can only consolidate your loans with the federal government once (see more below). There is no limit on how many times you can refinance loans with a private lender to take advantage of lower rates.
  • A single repayment plan: Once you consolidate your loans, your new weighted interest rate applies to your entire balance. It’s no longer possible to target loans with the highest interest rates for faster repayment. Although you can accelerate payments (make more than the required minimum monthly payment) on the entire balance of your consolidation loan, you cannot repay portions of a consolidation loan under different repayment plans.

Should I consolidate my student loans?

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.

When should I consolidate student loans?

  • You want to lower your monthly payment
  • You’d to stop juggling multiple, separate student loans
  • You’ll be earning more soon
  • You’re not close to paying off your loan

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.

Can I consolidate a consolidated loan?

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.

Can I consolidate parent PLUS loans with other types of direct federal student loans?

If you consolidate parent PLUS loans with other direct federal student loans into a Federal Direct Consolidation Loan, the only income-driven repayment (IDR) program that loan will be eligible for is income-contingent repayment (ICR), the least generous of all IDR plans.

You will not be eligible to enroll in PAYE, REPAYE or IBR to repay a federal direct consolidation loan that includes a parent PLUS loan.

Consolidating loans with a private lender (refinancing) disqualify those loans from all federal IDR plans.

What loans can you consolidate?

Most federal student loans are eligible to be combined into a federal Direct Consolidation Loan, including:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Direct PLUS Loans
  • PLUS Loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students
  • Federal Perkins Loans
  • Federal Nursing Loans
  • Health Education Assistance Loans

However, there are some key points to keep in mind before you decide to consolidate:

  • You can’t consolidate your private loans with your federal loans into a federal Direct Consolidation Loan.
  • You need to have at least one student loan that is in repayment or in your grace period.
  • If your loans are in default, you must meet certain requirements before consolidating.
  • Parent PLUS loans taken out by parents cannot be consolidated with your other federal loans.
  • You must begin repayment 60 days after your Direct Consolidation Loan is disbursed or sooner, depending on your servicer.
  • You must keep making your loan payments to your original loan servicer until your consolidation is confirmed and your initial loans have been paid off.
  • Private loans are not eligible for federal loan consolidation. If you want to consolidate your private loans with your federal loans, refinancing might be a better option for you.

Can you consolidate private and federal student loans together?

You can’t consolidate your private loans with your federal loans into a federal Direct Consolidation Loan.

However, if you have both private and federal loans, and wish to convert your federal student your loans into private student loans, you could consider refinancing your loans with a private lender.

Keep in mind that when refinancing with a private lender, you lose federal borrower benefits such as access to income-driven repayment programs, forbearance, or deferment, and the potential to qualify for loan forgiveness after 10, 20 or 25 years of payments. Some private lenders may offer similar benefits.

Can you consolidate student loans from different lenders?

Yes, you can. Any eligible federal loans can be combined in a direct federal consolidation loan, regardless of who the loan servicer is. If you have private loans they are not eligible for federal loan consolidation.

If you have a mix of both private and federal student loans, you can refinance them together with a private lender, even if you have private loans from multiple lenders.

Can you consolidate student loans with bad credit?

Debt consolidation with bad credit is possible, but it will likely take a bit of work.

The good news is that bad credit doesn’t mean you don’t have options, although a low credit score might limit your options.

  • Know your credit score: Knowing your credit score before you consolidate your loans will save you time, and help you figure out what options you may qualify for.
  • Watch out for certain debt consolidation companies: There are a number of companies that provide debt consolidation. While these companies may offer low monthly payments, it’s important to read the fine print and understand exactly what interest rates and fees you will be charged.
  • Explore peer-to-peer lending: Peer-to-peer lenders, like Prosper, connect private lenders with borrowers looking for loans. While a bank may turn you down due to poor credit, some peer-to-peer lenders might not be as strict.

Student loan debt can be considered “good debt” because it is seen as an investment in your future. If you’re able to make consistent, timely payments towards your student loans, you may see your credit score improvement over time.

How do you consolidate student loans?

If you’ve read about the pros and cons of student loan consolidation, and understand the differences between private and federal loan consolidation, you might have decided that federal loan consolidation is right for you.

Applying for student loan consolidation shouldn’t take you very long, as long as you’ve done your research and have all your required information at hand.

How to apply for federal direct loan consolidation

Once you start the application process, you’ll need to complete it in one sitting. Remember, you’ll need to provide details about all the existing loans that you want to consolidate, and choose a new loan servicer and repayment plan when you apply to consolidate.

Follow these three easy steps to consolidate your federal student loans:

Step 1: Once you’re ready, head on over to studentloans.gov. Log in, and fill out the consolidation application. You can find the application under the ‘Repayment and Consolidation tab’, or go here.

Select all the loans that you want to consolidate (you can consolidate all your existing loans, or just choose some to consolidate). And if you have any Parent PLUS loans, consolidating those with your other federal loans will mean you might lose access to certain repayment plans.

*Consolidating with the federal government is always free. If you are asked to pay for anything, you’re probably not using a trustworthy site!

Step 2: Once you’ve entered in the information about all the loans you wish to consolidate, you’ll need to choose a student loan servicer.

It is your student loan servicer’s duty to help keep you in good standing, by ensuring you make timely payments, helping you change repayment plans, and providing the support you need.

Step 3: Choose a new repayment plan. There are eight different repayment plans you can choose from for your new consolidated loan. Use this repayment estimator to figure out which plans you qualify for, and which ones may be best for you.

That’s it, you’re done! Remember to review all your information to make sure it’s entered correctly and then hit submit.

Student loan consolidation eligibility

If you have eligible federal student loans and wish to consolidate them, keep in mind the following eligibility requirements:

  • Of all the loans you wish to consolidate, at least one must be a Direct Loan or an FFELP loan.
  • You must either be in the grace period for the loans you consolidate or be in repayment.
  • If your loans have already been consolidated, you cannot consolidate them again, unless you are adding on new loans.

Remember to keep making your loan payments in a timely and consistent manner until your consolidation application is approved! Simply submitting an application for consolidation does not mean you can stop making payments.

How to find the best student loan consolidation lender

While federal direct consolidation is pretty straightforward, if you’re interested in private student loan consolidation, or refinancing, it’ll take a little more work.

The only way to consolidate federal student loans is through the federal government, by using studentloans.gov, or by refinancing them through a private lender. But when it comes to private loans, there are a number of different lenders out there, all offering different interest rates and terms.

But don’t let the number of options overwhelm you — if you have private loans, it can be really helpful to compare the various offers that are available.

What are student loan consolidation interest rates?

When you consolidate your loans, your new interest rate will be calculated as the weighted average of all the loans you choose to consolidate. There is no cap on the interest rate of a federal direct consolidation loan.

What are the different repayment plans?

There are eight different repayment plans for federal student loan consolidation. These include income-based repayment plans such as PAYE and REPAYE, as well as the Standard 10-year repayment plan, and the Graduated Repayment Plan.

Keep reading for more information about the various repayment plans available.

The federal government’s repayment estimator can help you decide which repayment plans you qualify for, and which options are best for you.

When do I begin repayment?

You can begin repaying a consolidated loan 60 days after it is disbursed, or sooner. Once your application for consolidation is approved, your loan servicer will contact you to let you know when your first payment is due.

Depending on the amount and terms of your loan, and the type of repayment plan you have chosen, your loan repayment term can last anywhere from 10 to 30 years.

If you consolidate a loan or loans that are still in the grace period, you may be able to postpone the start of your repayment until the grace period ends. If any of the loans you wish to consolidate are in the grace period, remember to make a note of this in your application.

How to choose the right loan servicer

Not all student loan servicers are built the same. Consolidating your loans gives you the opportunity to choose a servicer that’s right for you.

When consolidating your federal direct loans, the government gives you the option to choose between FedLoan Servicing, Great Lakes Educational Loan Services, Nelnet, or Navient.

FedLoan Servicing: this is the Direct Loan servicing branch of the Pennsylvania Higher Education Assistance Agency (PHEAA).

If you can, and wish, to take advantage of the Public Service Loan Forgiveness program, keep in mind that your loan will automatically be transferred to FedLoan Servicing.

Great Lakes Higher Education: Great Lakes is a nonprofit that serves as a guaranty agency for the FFEL federal loan program.

Nelnet: Nelnet is a for-profit company that services student loans throughout the U.S. and Canada.

Navient: You’ve very likely heard of Navient – a for-profit company and the largest private student loan servicer in the country. Navient acquires, finances and services private education loans and federal loans in the FFEL program.

It’s best to research each of these servicers and read their reviews before making your decision.

Which repayment plan is right for you?

There are eight different repayment plans you can choose from when you consolidate federal direct loans. It’s best to read up on the differences between the various plans before you make your choice.

There are two basic buckets into which repayment plans fall — those that are income-based and those that are not.

    • Income-driven repayment plans determine your minimum monthly payment as a percentage of your annual income. Typically, these plans may also have a longer repayment term, ranging from 10 to 20 or 25 years. Income based plans do offer loan forgiveness for any remaining loan balance at the end of your repayment term.However, remember that any forgiven amount is considered income, and you must pay taxes on it(loan forgiveness granted after 10 years of payments under the Public Service Loan Forgiveness program is not considered taxable income)Further, if your repayment plan is longer with an income-based plan, you’ll end up paying more in interest overall, even if your monthly payments decrease.
    • Non-income-based plans do not depend on your income. These include the Standard 10-year repayment plan, the graduated plan, and the extended repayment plan.If you don’t want to deal with the hassle of re-applying for an income-based plan every year, you might look into one of the regular repayment plans.

Finding the best companies to help you refinance your student loans doesn’t have to be difficult. You can use the Credible platform to request personalized rate quotes from all the best student loan refinance lenders listed with a single application.

You can even check your prequalified rates without sharing your personal information or incur a hard credit pull, so it won’t affect your credit.

Check Your Rates Now

How much can I save by refinancing my student loans?

Borrowers save an average of $18,688 when they refinance their student loans using Credible. Check out our student loan refinancing calculator below to see how much you could cut your student debt by.

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Credible is a multi-lender marketplace that allows borrowers to request competitive loan offers from vetted lenders, without affecting their credit scores.

 

¹Citizens Bank Education Refinance Loan Interest Rate Disclosure:

Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 1, 2018, the one-month LIBOR rate is 1.88%. Variable interest rates range from 2.88% – 7.98% (2.88% – 7.98% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 3.50%-8.34% (3.50% – 8.34% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.