When you consider student loan consolidation vs refinancing, remember that student loan refinancing enables you to receive a lower interest rate on your student loans and therefore save money. You can refinance your federal student loans, private student loans or both. Student loan refinancing is one of the most effective ways to save money on your student loans and pay off your student loans faster.
Student loan consolidation enables you to combine your existing federal student loans into a single, Direct Consolidation Loan. You can analyze student loan consolidation with a student loan consolidation calculator. Unfortunately, private student loans cannot be consolidated into a Direct Consolidation Loan. With a Direct Consolidation Loan, your interest rate is equal to a weighted average of the interest rates of your existing federal student loans, rounded up to the nearest 1/8%. Therefore, you will not receive a lower interest rate with federal student loan consolidation.
Student loan refinancing has many benefits, including:
The decision to refinance student loans is a personal choice. If you have a strong credit score, stable income, are employed and want to lower your interest rates on your student loans, then student loan refinancing is an option to consider.
With student loan refinancing, you can lower your interest rate, pay off your student loans faster and save up to tens of thousands of dollars on your student loans.
Student loan refinancing is free so it won’t cost you anything to refinance student loans. The application takes about 10 minutes and you can check your new interest rate for free in just two minutes.
A student loan refinance calculator can show you how much you will save through refinancing student loans. Plus, this student loan refinance vs consolidation calculator compares how much money you can save through student loan refinance vs consolidation.
You can compare the lowest rates and find the best lender for you.
When you refinance student loans, you can lower your interest rate, save money and pay off your student loans faster.
A student loan consolidation calculator shows you whether you save money through student loan consolidation.
Unfortunately, student loan consolidation does not save you money. Federal student loan consolidation is an organizational tool to combine your existing federal student loans into a single Direct Consolidation Loan. The interest rate for a Direct Consolidation Loan is equal to the weighted average of the interest rates on your federal student loans, rounded up to the nearest 1/8%. So, a Direct Consolidation Loan may actually increase your student loan interest rate.
This is it is important to compare the benefits and drawbacks of student loan consolidation vs refinancing.