The terms “refinance” and “consolidate” are occasionally utilized interchangeably whenever discussing student education loans. But whilst it’s possible to mix multiple loans into one through the entire process of refinancing, the word “student loan consolidation” is frequently utilized to spell it out a certain strategy available through the government.
Federal pupil loan consolidation is whenever you join a few federal loans together, causing you to be with an individual outstanding stability and payment that is monthly. It is various from refinancing, though, you also won’t get a lower interest rate because you don’t need good credit to qualify, and.
Rather, your brand new price should be a weighted average of the past loans’ prices, rounded as much as the following one-eighth of just one%. Your rate of interest is likewise fixed, while refinance loan providers generally speaking supply you with the solution to select from fixed and variable rates of interest.