The interest rate on your direct consolidation loan will be the weighted average of your previous rates, rounded up to the next 1/8 of 1%.It won’t be determined by your financial history, as it would be if you refinanced.Your servicer will let you know when your first payment is due and how to submit it.[Back to top] Private student loan consolidation, or refinancing, means replacing multiple student loans — private, federal or a combination of the two — with a single, new, private loan.Make sure you’ve decided each before you get started.You can use Federal Student Aid’s Repayment Estimator tool to see how much you’d pay per month on each repayment plan.This article covers: Federal student loan consolidation basics How to consolidate federal student loans Benefits of federal consolidation Drawbacks of federal consolidation Private student loan consolidation (student loan refinancing) When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.Consolidating your federal loans through the Department of Education is free.
Consolidation can’t be undone, so it’s important to understand what you could give up when you pursue it.
By extending the repayment term, you can significantly reduce the amount of money you’re required to pay each month.
If you’re on a tight budget, this can provide you with the extra breathing room you need to pursue other important financial goals, like building your emergency fund. Some consolidation plans offer flexible repayment terms.
You can apply for a direct consolidation loan online at
Log in with your Federal Student Aid ID and click on “Complete a Consolidation Loan Application and Promissory Note.” You’ll need to finish the application in one session, so set aside at least 30 minutes to fill it out.
If you already work with one of these servicers, it may be easier for you to choose that company so you don’t have to transfer all your loans to a new one.