Fortunately, we’ve highlighted the six best banks and lenders to help you refinance and consolidate both private and federal student loans, based on your financial situation.With student loan consolidation, you may be able to refinance at a lower interest rate, decrease your monthly payment, or both!Consolidation, on the other hand, is a strategy used when you owe balances on more than one student loan.
Reducing the interest rate on an expensive loan can potentially save you thousands or even tens of thousands of dollars over the life of the loan.
Finding the right bank to refinance or consolidate your student loans is confusing.
If you do nothing but combine your loans, then you do not save any money, and the total amount you pay monthly does not decrease. You may have heard someone say, “I consolidated my federal loans into one federal loan and refinanced it into a lower payment.” In this case, the use of the word “refinance” is not correct (I’ll provide a more in-depth explanation of refinancing in the next section).
The reason people often misuse this term is that they associate refinancing with getting lower monthly payments.
But consolidation takes all of that diverse debt and puts in into one basket, namely a single loan with just one payment to worry about making each month.
The goal is to simplify your financial life and make it much easier to keep tabs on your student loan debt.
But, there are some things you can do to minimize the cost of those loans—things like loan consolidation and refinancing.
Many PT students and recent grads are confused on the topics of refinancing and consolidating student loans.
I’ll also explain the advantages and disadvantages of refinancing and consolidating your student loans.
In the context of student loans, consolidation simply means combining multiple loans into one.
Student loan consolidation or refinancing could be a viable option to simplify your payments, or even save money, but what do these strategies entail?