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You could leave college with multiple student loans for many reasons. You might have had to take out a loan each year, or you might have needed multiple loans to cover a year’s costs.
Consolidating those loans into a new loan with one payment is a simple way to lower your monthly costs and streamline the repayment process.
If you have federal student loans and private student loans, you can refinance both into a new private loan. But you should consider your options first before making a decision, as you’ll lose certain benefits that come with federal loans, including income-driven repayment plans and eligibility for loan forgiveness.
Here are your options for consolidating federal and private loans together:
- Can I consolidate private and federal student loans together?
- How to consolidate federal student loans
- How to consolidate private student loans
- Should I consolidate my student loans?
Can I consolidate private and federal student loans together?
No. If you have private and federal student loans, you can’t consolidate both into a new federal loan.
For student loans, the term consolidation typically refers to federal student loans, whereas private student loans are refinanced.
When you consolidate your federal loans, you combine all the student loan balances from each year of school into one Direct Consolidation Loan with a single monthly payment. Your credit score isn’t a factor when determining your new interest rate. Instead, it will be a weighted average of the rate you were paying on the loans you consolidated.
If you have private student loans, or a combination of federal and private loans, you can combine them into a new private loan by refinancing. Your interest rate on the new loan will be based on your credit score and income.
Learn More: How to Find Your Student Loan Balance
How to consolidate federal student loans
The U.S. Department of Education offers this option at no cost to you, which can make your loan repayment more manageable.
When you consolidate your federal student loans, the government determines the median interest rate for all included loans and rounds up by one-eighth of a percentage point, so most borrowers won’t get an overall lower interest rate. The new interest rate is the rate for the loan’s entire life.
Consolidating your federal student loans has several benefits, including simplifying your monthly budget. You’ll still have access to federal benefits, like income-driven repayment plans and loan forgiveness programs.
But you can also expect some drawbacks. When you consolidate your federal student loans, you’ll lose any rate discounts and credit toward any payments you were making toward loan forgiveness under an income-driven payment plan. You can choose to consolidate some of or all your loans.
The table below shows how a Direct Consolidation Loan can affect your monthly payment, depending on the repayment term you choose.
For each loan, we assumed balances of $23,000 (the maximum Direct Subsidized Loan amount allowed per year for undergraduate students) and the standard 10-year repayment plan that’s the default for all student loans. We used the federal student loan rates applicable to each academic year the loans were for.
|Direct Subsidized Loans
|Consolidated payment by term
|Loan 1 (2018-19 academic year)
|10 years: $937
|Loan 2 (2019-2020 academic year)
|15 years: $687
|Loan 3 (2020-21 academic year)
|20 years: $564
|Loan 4 (2021-22 academic year)
|30 years: $446
|Total monthly payments:
How to consolidate private student loans
If you have multiple private student loans and you want to consolidate them into one monthly payment, you’ll need to refinance your loans. This allows you to combine the separate balances into a new loan with one monthly payment. Refinancing private loans potentially allows you to lower your interest rate too.
One potential drawback is that when you refinance your private student loans, you could end up with longer repayment terms. If you choose a longer repayment term, your monthly payment will be lower, but you could pay more interest over time.
When you’re ready to refinance your student loans, compare rates from multiple private lenders using Credible’s online marketplace to ensure you can find the best fit for your financial needs.
The student loan consolidation companies in the table below are Credible’s approved partner lenders. Because they compete for your business through Credible, you can request rates from all them by filling out a single form. Then, you can compare your available options side-by-side. Requesting rates is free, doesn’t affect your credit score, and your personal information is not shared with our partner lenders unless you see an option you like.
|Variable rates from (APR)
|Fixed rates from (APR)
|7.12%+ - 11.19%+8
|7.620%+ - 14.520%+8
|Compare personalized rates from multiple lenders without affecting your credit score. 100% free!
All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures | 8Nelnet Bank Disclosures
To refinance your loans, you’ll need to provide all the lender information for each loan, including the total balance, payment amount, and contact information. You may also need to have your account numbers available. Once your loan is processed, your new lender will pay off your previous loan balances.
Check Out: When to Refinance Student Loans
Should I consolidate my student loans?
If you’re consolidating your federal student loans or private loans, you’ll likely find the benefits outweigh any potential drawbacks. Streamlining your payments can make the monthly budgeting process much more manageable.
But if you want to consolidate your federal and private student loans, you’ll need to decide if the benefits outweigh some potentially more significant drawbacks. Consolidating your student loans could get you a lower interest rate, especially if you have a healthy credit history. A lower interest rate means lower monthly payments and a lower loan cost overall.
If you want to maintain your federal student loan benefits but also want one monthly payment, consolidating your federal student loans into a federal Direct Consolidation Loan could be helpful.
Federal student loan payments are currently paused and interest rates are set at 0% as part of the CARES Act, a response by the federal government to help citizens during the COVID-19 pandemic. The repayment pause is set to expire on September 1, 2023. If you currently have federal student loans on pause, you might want to wait until payments resume to consider a refinance since it’s hard to beat a 0% interest rate.
If you have private student loans, refinancing could be beneficial if you can secure a lower interest rate on your refinance loan.
Whether you have federal student loans or private student loans, you should use an online loan calculator to estimate what your new payments could look like so you can decide if refinancing or consolidating are good options for you.
Step 1. Enter your loan balance
Step 2. Enter current loan information
Step 3. Enter your new loan information to start calculating your savings
If you refinance your student loan at % interest rate, you can save will pay an additional $ monthly and pay off your loan by . The total cost of the new loan will be $.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Check Personalized Rates
Checking rates won't affect your credit score
How to get relief for student loans
If refinancing or consolidating your student loan debt isn’t the right solution, you may have other options. Most loan servicers have deferment and forbearance options that can offer you a temporary reprieve from your monthly payments. Your loan servicer may require a balloon payment at the end of the deferment or allow you to add your missed payments to the end of your loan.
Federal student loan borrowers have many options, including income-driven repayment plans, Graduated Repayment Plans, forbearance, Extended Repayment Plans, and the Revised Pay as You Earn Repayment Plan.
If you can’t make your monthly student loan payments, you should contact your loan servicer to learn about your available options.