If you have both federal and private student loans you cannot consolidate the different loan types together under the federal consolidation program. However, you can refinance federal or private student loans separately or together through a private lender.
Just remember when you refinance federal student loans into a private student loan, you lose federal repayment benefit options. If sometime in the future, you cannot make the new private student loan payments, you’ll need to refinance and qualify to get a lower payment.
Think of this as having an existing car loan and wanting a lower payment and refinancing with another lender.
Things to consider:
- How much Federal and private student loans do I have?
- Is it beneficial to consolidate your Federal loans and separately refinance private loans?
- Will refinancing your federal and private loans together save you money?
- Can you afford new private loan payments?
- Does your existing private student loan have any prepayment penalties?
- What additional benefits offered by the lender?
We’ve done a great deal of homework to find the best student loan refinancing companies that offer additional benefits and perks. Check the marketplace to learn which lender may have the right loan for you.
Best Reason to Refinance Student Loans
If you have multiple private student loans, it can help you pay off those loans sooner by giving you one single payment as opposed to multiple payments with varying interest rates and terms. You may also save money by locking into a fixed-rate loan and a shorter term.
Consider consolidation of your Federal student loan through the Federal student loan consolidation program. Simply, call your Federal student loan servicer and inquire about consolidating multiple Federal student loans. Ask about repayment options: income-based repayment graduated plans and extended plans.
If you have a mixture of Federal and private student loans, think thoroughly about the benefits of refinancing the two types of student loans together. The Federal repayment benefit options may not be necessary for you but that’s a decision you’ll need to make.