Am I eligible to refinance my student loans?

Student Loan Consolidation: Why Consolidate or Refinance?

Why Consolidate or Refinance Your Student Loans

Student loan consolidation or refinancing, simplifies and streamlines your finances by replacing multiple loan payments with a single loan payment.

Why Consolidate Student Loans?

The reasons you should consider consolidating or refinancing your loans have as much to do with financial factors as they do with non-monetary concerns. Your monthly budget may be extremely tight, your interest rates may be higher than current market rates, and you could be missing an opportunity to save on the total amount of interest repaid by locking in a lower APR and choosing the right repayment terms.

At the same time you may be experiencing additional stress if you are shelling out so much money each month on your student loan payments that it affects your ability to make ends meet and save for the future, including limiting your ability to contribute to your retirement savings.

The bottom line is there are a lot of variables in play that may influence your decision to consolidate or refinance. If you’re looking to take control of your financial future, it’s best to start with a solid understanding of your refinance and consolidation options. 

Restructuring Student Loan Debt

There are two types of student loan debt restructuring: federal consolidation and refinancing with a private lender. A Direct Consolidation Loan can consolidate federal student loans and federal parent loans. A private refinance loan can refinance both federal student loans (including Parent PLUS Loans) and non-federal student loans from private financial institutions (such as banks and credit unions) as well as non-federal student loans financed by states or colleges/universities.

Student Loan Eligibility

Direct Consolidation Loan:

✔ Direct Subsidized Loans (sometimes called Subsidized Stafford Loans)

✔ Direct Unsubsidized Loans (sometimes called Unsubsidized Stafford Loans)

✔ Grad PLUS Loans

✔ Parent PLUS Loans

✔ Perkins Loans

✔ Existing federal consolidation loans (in some cases)

✔ Federal Family Education Loans (FFELP)

Private Refinance Loan:

✔ Private student loans

✔ Private parent loans

✔ Direct Subsidized Loans (sometimes called Subsidized Stafford Loans)

✔ Direct Unsubsidized Loans (sometimes called Unsubsidized Stafford Loans)

✔ Grad PLUS Loans

✔ Parent PLUS Loans

✔ Perkins Loans

✔ Federal Family Education Loans (FFELP)

✔ Existing federal consolidation loans

Federal Student Loan Consolidation Pros

  • May reduce the amount of your monthly student loan payments by increasing the length of your repayment period
  • Simplify repayment with a single loan instead of multiple loans
  • Renew eligibility for deferment and forbearance benefits
  • Multiple payment plans (including income-based repayment for some borrowers)

Federal Student Loan Consolidation Cons

  • Total cost of loans could increase if the repayment period is extended
  • Potential loss of borrower benefits offered with the original federal loans
  • The remaining grace period on the existing loans will be lost if they are consolidated before the end of the grace period
  • Your interest rate will remain roughly the same – it will not go down
  • If you are a servicemember on active duty and you refinance or consolidate your student loans while serving, you will no longer qualify for an interest rate reduction under the Servicemember Civil Relief Act (SCRA) for student loans taken out prior to your service

Private Student Loan Refinancing Pros

  • Potentially qualify for a lower interest rate
  • May reduce monthly student loan payments by increasing the length of your repayment period
  • Switch to the lender of your choice
  • Combine both federal and private loans together
  • Many lenders do not charge origination fees
  • Depending on the lender, you may be able to transfer Parent PLUS Loans from the parent’s name to the student’s name (subject to credit qualifications of the student)

Private Student Loan Refinancing Cons

  • All benefits associated with your federal student loans will be forfeited, such as repayment plans and forgiveness and discharge benefits
  • If the repayment term is extended, overall loan costs may increase
  • A creditworthy cosigner may be required to qualify for the lowest interest rates

How Private Student Loan Refinancing Can Save You Money

  1. If you qualify, a private refinance loan can help you cut the interest rate on some or all of your federal loans and your private loans.
  2. When your monthly payment is reduced, you can use the savings to pay off higher interest rate debts.
  3. Some private lenders offer an additional interest rate reduction to borrowers with other accounts, such as checking or savings.

How to Compare Student Loan Refinance Lenders

The features and benefits you want to compare will depend on your overall goal for refinancing. Some items to look at when comparing lender options are:

Interest Rates

  • Does the lender offer variable and fixed rates?
  • Can you get a better rate with a cosigner?

Repayment Terms

  • What repayment terms are available? (Most lenders offer terms between 5 and 20 years, actual terms vary from lender to lender.)

Loan Fees

  • Does the lender charge and origination fee?

Other Benefits

  • Is there an interest rate deduction for enrolling in auto-pay?
  • Does the lender offer cosigner release?
  • Does the lender have a program allowing parents to refinance their parent student loans in their child's name?

Do I Have to Include All of My Student Loans When I Refinance or Consolidate?

It’s worth noting that you may choose to do both. You may want to consolidate your federal student loans with the federal program, and refinance your private loans with a private lender. Or you may want to include some federal student loans in a student loan refinance, but not all. With either option you are not required to include all of your loans. However, if reducing the number of bills you need to track each month is one of your goals, the more loans you combine, the fewer monthly bills you will have.

Learn More About Student Loan Refinancing

Private Student Loan Refinancing Interest Rates

Private Student Loan Refinancing Interest Rates

The interest rate on a private refinance loan is determined by the borrower's or cosigner's credit rating. See the impact of different rates on payments.

Federal Student Loan Consolidation Interest Rates

Federal Student Loan Consolidation Interest Rates

When you consolidate your federal student loans, your interest rate will be roughly the same as your current loans. See an example of the rate calculation.

Pros and Cons of Refinancing Parent Loans

The Pros and Cons of Refinancing Parent PLUS Loans

Many parents take out student loans to pay for a child's college education. Learn about the pros & cons of refinancing Parent PLUS Loans & private loans.

How Student Loan Consolidation Works

How Student Loan Consolidation and Refinancing Works

Wondering what the first steps are in consolidating or refinancing your student loans? Check out these step-by-step instructions on how to get started.

Lending Partners

Interest Rates
  • Fixed as low as 3.20% APR
  • Variable as low as 2.48% APR
  • Hybrid loan rates as low as 3.79% APR
  • Lowest APRs offered include an auto-pay discount
Max. Loan Limits Up to $500K
Min. Loan Amount $10,000 Degree Req. Required completion of one of the following degrees at a qualified school:
  • MBA
  • JD
  • MD
  • Engineering
Repayment Terms 5, 10, 15, 20 years
Interest Rates
  • Fixed as low as 3.37% APR
  • Variable as low as 2.35% APR
  • Lowest APRs offered include an auto-pay discount
Max. Loan Limits No Maximum
Min. Loan Amount $10,000 Degree Req. Required completion of degree Repayment Terms 5, 7, 10, 15, 20 years
Interest Rates
  • Fixed as low as 5.74% APR1
  • Variable as low as 4.99% APR1
  • Lowest APRs shown include an Auto Debit Reward
Max. Loan Limits
  • $150K - Undergraduate or Graduate degrees
  • Higher limits may apply for specific fields of study
Min. Loan Amount $5,000 Degree Req. Students with loans from eligible schools may apply. Repayment Terms 10 - 20 years
Interest Rates
  • Fixed as low as 3.25% APR
  • Variable as low as 2.72% APR
Max. Loan Limits Up to $300K
Min. Loan Amount $7,500 Degree Req. Must hold at least a bachelor's degree Repayment Terms 5, 8, 12, or 15  years.
Interest Rates
  • Fixed from 3.49% - 8.82%
  • Variable from 2.51% - 8.09%
  • Lowest APRs offered include an auto-pay discount
Max. Loan Limits
  • $125K - Undergraduate
  • $250K - Graduate
  • $300K - Medical, Dental, Veterinary
Min. Loan Amount $5,000 Degree Req. Graduated from a LendKey eligible school Repayment Terms 5, 7, 10, 15, and 20 years
Interest Rates
  • Fixed as low as 3.74% APR
  • Variable as low as 4.50% APR
  • Rates above include 0.25% auto-debit discount
Max. Loan Limits
  • $120K
  • Minimum qualifying credit score is 660 with an eligible cosigner
Min. Loan Amount $10,000 Degree required. Must have graduated from an eligible school. Repayment Terms 5, 10, or 15 years
Interest Rates
  • Fixed rate range: 3.25% – 8.00% APR1
  • Variable as low as 2.88% – 7.63% APR1
  • No application or prepayment fees
Max. Loan Limits
  • Consolidate and refinance up to $250,0003
Min. Loan Amount $5,0003 Degree required. Must have graduated from a public or private, not-for-profit, degree granting institution. Repayment terms 5 – 15 years2
Interest Rates
  • Fixed rate range 3.25% – 7.25%1
  • No origination fees
  • No prepayment fees
Max. Loan Limits
  • Consolidate and refinance up to $200,000
Min. Loan Amount $5,0003 Reset Refinance Loan available to both parent and student borrowers. Repayment terms 5 – 20 years
Am I eligible to refinance my student loans?