This results in reduced monthly repayments and a longer term for the loan.
The "refinancing" aspect is something the government does not really offer.
Refinancing allows you to get a better interest rate on your loans than you did when you first borrowed.
When even the basic term "consolidation" means different things for different lenders, the process can understandably seem daunting.
But if you're looking to save thousands on student loan interest payments -- as well as time and headaches from managing multiple monthly payments -- then understanding the consolidation process is critical.
(For example, if you consolidate Stafford Loans at the 6.8% rate issued from 2006 to 2013, the rounding will bring the rate up to 6.875%.) provides a great rundown on the personal considerations you'll need to make in this article.
If you look to private lenders to consolidate, you'll get the benefits of making just one monthly payment as well as greater choice in determining what type of loan is the best fit for you.
You're effectively replacing your existing loans with one new loan, and you can choose from options that offer you access to different loan terms and fixed, variable, and hybrid interest rates.
With many private lenders, you can consolidate both private student loans and federal student loans separately or together.
You can only consolidate federal, not private, student loans through this program.
(Note: You cannot consolidate federal and private student loans together through the federal government, either.) You can consolidate an existing Direct Consolidation Loan so long as you have a new eligible loan with which it can be consolidated.
Here's the rundown you need to determine whether student loan refinancing and consolidation is right for you.