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 Refinancing can be done with one loan or several loans and involves getting a new loan with a different (usually lower) interest rate than before that is based on your (or your cosigner’s if applicable) qualifications as a client. When you refinance, you typically work with a company to pay off the original loan(s) and get a new unified loan at a lower rate. 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 clients refinance multiple loans within one application. During our loan acceptance process, we'll ask you 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.
