But before you dismiss the idea of refinancing, you should first take a look to see if any of these benefits apply to you.
Now that you know it’s an option and you understand how it works, you can better assess whether it’s right for you.
Student loan consolidation, or refinancing, pays off your existing loans with a new student loan.
With prevailing interest rates at historic lows, some private lenders offer rates that are significantly better than a high-rate federal loan.
This is particularly true for grad school borrowers who use unsubsidized Direct loans and Graduate PLUS loans to finance their education.
offer benefits and protections that do not transfer to private lenders.
This is often the reason that people cite when they say you shouldn’t combine federal and private loans.
This applies to both student and parent borrowers as well as married couples.
Since your loans most likely have different interest rates, the interest rate on your consolidated loan is taken as the weighted average of all of your loans’ interest rates rounded up to the closest 1/8th of a percentage point.
Federal loan consolidation is an option for borrowers who have multiple student loans or parent education loans.