Refinance rates with Laurel Road start at 1.89%.
Checking your rates won’t affect your score.
Most college graduates leave school with a number of different student loans, racked up throughout their years of study. Each of these loans can come with different terms, payments, servicers and statements. The sheer amount of numbers and other information can be difficult to track.
If you feel overwhelmed with managing your student loan debt, don’t panic — you do have options. One way to make student loans easier to deal with is through federal and private student loan consolidation.
When you consolidate your debt, you combine all those loans into one. You do this by taking out a new loan for the amount of the balances of the existing loans, use the newly borrowed money to repay all the older debt, and then focus on repaying your one new loan.
This simplifies your financial situation and makes your debts easier to keep track of. Other benefits of consolidation could include securing more favorable interest rates (if you also refinance) and lower monthly payments (by extending your repayment term).
Federal and private student loan consolidation: What you need to know
Before you choose to consolidate your loans, examine your situation carefully to determine if this is the best course of action. This isn’t a solution that works well for everyone.
Consolidation doesn’t always result in a lower interest rate — even if you refinance — and lower monthly payments usually mean paying the loan over a longer period of time and spending more on interest.
You also need to know that the process is different for federal student loans and private student loans, especially if you’re trying to manage both kinds of loans. Private lenders may be able to consolidate both private and federal loans, but you cannot roll private loans into a new federal Direct Consolidation Loan.
And just because you can use refinancing to consolidate private student loans together with your federal loans doesn’t mean it’s a good idea either. Doing so eliminates any benefits or eligibility for federal repayment plans or loan forgiveness that you could have received from a federal program.
If you think you’ll need an income-driven repayment plan or want to pursue federal forgiveness options, it’s best not to mix federal and private loans.
Should I consolidate my federal student loans?
When you choose to consolidate your federal student loans, the government will combine all your separate debts into a single new loan, known as a Direct Consolidation Loan. You can apply once you graduate, otherwise leave school or become enrolled less than half-time; these events will trigger the start of your repayment.
Most federal student loans are eligible for consolidation, including subsidized and unsubsidized Direct loans, subsidized and unsubsidized federal Stafford loans, Direct PLUS loans and others. Although the Perkins loan program came to an end in September 2017, old Perkins loans are still eligible for consolidation, as well.
If you have a PLUS loan in the name of a parent, that loan cannot be transferred to the student during consolidation. Also, you can’t consolidate a defaulted loan until you make a repayment agreement with the loan’s servicer or agree to repay the new consolidated loan with one of the government’s eligible repayment plans.
Pros of consolidating federal student loans
- Direct Consolidation loans offer one single payment and potentially lower monthly payments.
- Consolidating federal loans is free via the federal government. Beware of companies which offer to help you consolidate federal student loans for a fee.
- No credit check is required to consolidate federal student loans, and you can apply online.
On the other hand, if you’re only interested in simplifying your situation, consider finding other ways of tracking your debt and managing repayment. That’s because Direct Consolidation Loans have drawbacks, too.
Cons of consolidating federal student loans
- A lower monthly payment means paying the loan over a longer period of time, which will cost you more money due to interest charges.
- When you consolidate your federal student loans, you lose the ability to strategically target your highest interest and/or highest balance loans using a method such as the debt avalanche or debt snowball.
- Federal consolidation doesn’t result in a better interest rate. Rather, the new rate is a weighted average of all the interest rates on your student loans, rounded up to the nearest one-eighth of a percentage point.
- Some federal consolidation loans may come with higher interest rates than private loans. For example, the average interest rate for Direct unsubsidized loans for graduate or professional students is 6.6%, while some student loan refinancing lenders offer rates below 3% if you qualify. That difference can really add up over time — you can check our refinancing calculator to see how much.
Be sure to explore all your options and weigh which benefits — those from Direct Consolidation loans or those from other strategies, such as refinancing — will help you the most.
Should I consolidate my private student loans?
While private student debt isn’t eligible for federal loan consolidation, you can still consolidate your private loans by refinancing with a private lender. Requirements and eligibility will vary from one financial institution to another.
Some private lenders may require you borrow a minimum amount. Some might use different criteria to evaluate your creditworthiness than others. It’s best to reach out to individual lenders to ask for their specific rules around eligibility. You can compare the results to determine what might be a good fit for you.
Some of the benefits and drawbacks of consolidating your private student loans are similar to those for consolidating federal loans:
Pros of consolidating private student loans
- You may benefit by creating an easier-to-manage financial situation, getting better terms or securing lower monthly payments.
- One big benefit of consolidating private student loans through refinancing is potentially securing a much lower interest rate. Your rate will be based on your creditworthiness or that of a cosigner.
- If your credit score has significantly improved from the time you took out your loans, or you have built a solid income and employment history, you’re more likely to get a low rate that could make refinancing a smart financial move.
Cons of consolidating private student loans
- When considering consolidation, keep in mind whether you’re also extending the repayment term. Again, with more payments comes more interest.
- While there’s no cost to originate a federal Direct Consolidation Loan, some private lenders will charge an origination fee.
- A credit check is required to consolidate private student loans via refinancing, which may be a downside, depending on your credit history.
Again, it’s important to evaluate all your options before making a decision.
Consolidation vs. refinancing
As you probably noticed, consolidating private student loans is generally done by refinancing. However, you don’t necessarily have to consolidate in order to refinance. You can cherry-pick just the loans that would save you money by refinancing, while leaving other debt (perhaps including your federal loans) as they are.
This might make more sense if you have fewer loans and just one has a very high interest rate. You can refinance to a lower rate and maintain the original benefits and rates on all your other loans.
Remember that the federal government will not refinance your loans — they only offer Direct Consolidation loans. Private lenders will refinance both federal and private student loans.
If you want to compare the immediate benefits of Direct Loan consolidation vs. private consolidation and refinancing for your situation, check out the calculator below:
Consolidation vs. Refinancing Calculator
Total interest paid
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Refinancing is the only way to lower your interest rate but you may lose some of the safeguards associated with having federal loans, so make sure you are fully educated on the decision by reading our recommended resources below:
Again, just like with consolidation, you may not want to refinance any federal loans because you’ll lose your eligibility for government-backed repayment plans. But if you don’t plan to use those programs and can financially benefit by refinancing to a lower interest rate, this may be a viable option for you.
Bottom line on federal and private student loan consolidation
While consolidating student loans may seem like an attractive option, there are many factors to consider in determining if it’s the right move for you. Make sure you ask the right questions and weigh all the pros and cons before deciding, so you can pay your student loans off as quickly and economically as possible.
Julie Evans contributed to this report.
Interested in refinancing student loans?Here are the top 9 lenders of 2021!
|Lender||Variable APR||Eligible Degrees|
|1.88% – 6.15%1||Undergrad & Graduate|
|1.88% – 5.64%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|2.25% – 6.39%5||Undergrad & Graduate|
|1.88% – 5.64%6||Undergrad & Graduate|
|1.90% – 5.25%7||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|2.13% – 5.25%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of June 1, 2021.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.59% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2021 Earnest LLC. All rights reserved.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates from 2.74% APR to 6.74% APR (with autopay). Variable rates from 2.25% APR to 6.39% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
6 Important Disclosures for Navient.
7 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.