Student loan consolidation is limited to federal student loans. Federal student loan consolidation combines one or more underlying federal student loans into a new federal consolidation loan. That means one monthly payment instead of having to juggle many different ones, sometimes with multiple loan companies. With a federal loan consolidation, your interest rate will be a fixed rate, weighted as an average of the underlying loans included in the consolidation loan, rounded up to the nearest one-eighth of one percent. You won’t save money on interest rates, but it can make life easier by reducing the amount of time you spend managing different payments.
Private Student Loan Refinancing1 can be done with one or several loans and involves getting a new unified loan with a different (usually lower) interest rate than before, based on your or your cosigner’s2 (if applicable) creditworthiness as an applicant. Both private and federal student loans may be included in the private student loan refinance. Please click here for additional information regarding loss of benefits.
At Earnest, many of our applicants refinance multiple loans within one application. During our loan acceptance process, we'll ask you for the lender(s) we'll be paying and how much money to send to them. The end result is one Earnest loan with one monthly payment.
1 Please note that you will lose benefits associated with your underlying federal loans, such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options, if you refinance into a private loan. If you file for bankruptcy, you may still be required to pay back this loan.
2 Adding a cosigner does not guarantee approval or a lower rate. Loan terms depend on you and your cosigner’s credit profile and other factors.