Home / Consolidation / Student Loan Consolidation: What Is It? Who Can Help You?

Student Loan Consolidation: What Is It? Who Can Help You?

Student Loans Consolidation

Getting an education is an expensive endeavor, and afterward, whether you graduate or not, repaying the loans you took out can prove to be quite challenging.

Before you default, or ask for forbearance, or go as far as bankruptcy a common solution to help make your loan payments more manageable is student loans consolidation. What is it? How does it work and how does it help?

What Is A Loan Consolidation?

Just like regular debt consolidation, a student loans consolidation is when you apply to take out one bigger loan from a lender to pay off the total amount of several other loans.

Now, there are two types of consolidation.

  • Federal Loan:

When you apply for consolidation with a federal loan, you go through the Department of Education. This is done for free and you cannot use the Department of Education’s consolidation program on your private loans.

After you consolidate the Federal loan, you’ll be set up with a loan servicer. The loan servicer will help you manage your repayments, which can be anywhere from 10-30 years.

A loan service may be able to help you qualify for the Student Loan Repayment Program, which is based on a percentage of your income, or even the Student Loan Forgiveness Program. For more details about federal loan consolidation, check out: Federal Loan Consolidation

Read More: Student Loan Forgiveness Provides An Amazing Chance

Read More: Various means and ways of dealing with student loans

2. Private Loan:

Private loan consolidation is usually considered “refinancing” and it doesn’t apply for the same benefits that you get through the department of education. You’ll apply to a lender like Citizen Bank or Sofi, to refinance something more manageable.

Pro’s of Consolidation

    • One payment

    • Avoid default

    • Save credit

    • Fixed interest rates

    • Lower monthly payments

    • Federal consolidation can lead to forgiveness

  • No minimum or maximum amount requirements

Read More: Student Loan Forgiveness program Plan and Options

Cons of Consolidation

  • More interest accrues over the years.
  • Can only consolidate your loan once, stuck with the interest rate you agree to.

Who Can Help You?

As noted above, the Department of Education is your first place to start for a Federal Loan but what about your private loan?

Read More: Getting An Education But At What Cost And Is It Worth It?

Before you pick a lender, you’ll want to consider a few things:

  • Loan amount
  • Loan period.
  • Interest rates (3-5% annual percentage rate)
  • Credibility: Are they accredited, do they have reviews? What are fellow borrowers saying about their services?
  •   Low to no fees: late payment fees and origination fees are standard. Do not accept anything otherwise.


Sofi is a popular choice for many borrowers and on average can save a student of $17,000. Their annual percentage rate is between 3.25-7.24%, with terms between 5-20 years. There is no maximum amount of a loan but a minimum of $5,000.

For more information on refinancing your private loan, check out their eligibility guidelines on their website: Sofi

The Final Word

consolidation of your loans may not make sense for you. The best thing to do is to have a student loan. Gov. if you choose to apply it, then you have an option. For private loans, you may need a credit score of 600 or better and a good job to even be considered.

Read More: All About consolidation Student Loans

By taking into account the information above, and doing a little more research, consolidation could save you from aggravation and make paying off your educational costs much more manageable.

Read More: Student loan forgiveness Program opportunity and advantages

Leave a Reply