Each year, many college graduates start their careers with several student loans to repay. To get the financial aid they need, students fill out the FAFSA® (Free Application for Federal Student Aid). After completing it, they usually receive a financial aid award letter. This letter often shows they’ll need to take out additional loans to fully cover that year’s tuition costs.
For individuals with multiple loans, consolidation can streamline the repayment process. By consolidating multiple student loan payments and potentially eliminating multiple monthly due dates, repayment becomes more manageable. However, it is important to note that the term "consolidation" carries different implications for federal student loans compared to private student loans.
Federal Student Loan Consolidation
A Direct Consolidation Loan from the U.S. Department of Education is the compiling of multiple federal student loans into one single loan. This alleviates having to deal with potentially several loan servicers, each with their own payment schedules and simplifies your payment into one payment to one servicer each month. Additionally, a Direct Consolidation can extend the length of the loan up to as many as 30-years, which could lower monthly payments but ultimately cost more in interest overall.
Important to note – when federal loans are moved into a Direct Consolidation Loan the interest rate associated with each individual loan doesn’t change. The new consolidated loan will have a weighted average fixed-rate interest rate based on the loans being consolidated and will be rounded up to the nearest 1/8th of one percent.
How to Apply for a Direct Consolidation Loan
Anyone with eligible federal student loans who has either graduated or has fallen below half-time attendance can apply to consolidate their loans. You cannot consolidate student loans that have yet to enter repayment , if you are in a grace period, it’s recommended to wait to consolidate, as you will lose the remainder of your grace period once the loan is processed, and you immediately begin repayment.
You can apply for a Direct Consolidation Loan by submitting your consolidation loan application either online or by mail—however, it is recommended that you complete your consolidate application online when possible. After submission, it’s important to continue making payments on your existing loans until the process is complete and you have a new consolidation loan servicer with a new payment and monthly due date. Don’t worry if you make an extra payment, your previous loan servicer will either send it to your new servicer as a credit, or refund the payment to you.
Things to Consider Regarding Direct Consolidation Loans
When you consolidate multiple loans it’s important to know that any outstanding interest on your existing loans will become part of the principal balance of your new loan, potentially making your new Direct Consolidation Loan outstanding principal greater than the sum of the outstanding principal individual loan amounts on your existing federal loans. That’s because your servicer(s) managing your student loan accounts will typically hold accrued interest in a separate “bucket” unless they are required to capitalize that interest—which means, add it to your outstanding principal balance. Your servicers are required to capitalized interest before transferring your loan to your new Direct Consolidation Loan.
It’s also possible that you might forfeit some benefits when consolidating your federal loans into a Direct Consolidation Loan, such as interest rate discounts or cancellation benefits. For example, if you are consolidating a Federal Perkins Loan into a Direct Consolidation Loan, your Federal Perkins Loan will lose its subsidy Meaning, if you ever put your Direct Consolidation Loan in a deferment status, your previous Perkins balance will be considered unsubsidized loan funds and will accrue interest, or the Perkins loan cancellation benefit.
Private Student Loan Bundling and Refinance
You also have the option of bundling several private student loans together or even multiple federal and private student loans together. While some might call this bundling a ‘consolidation” the terms and implications are quite different for you the borrower.
Technically, this bundling of loans would be considered refinancing your student loan(s). In doing so, you have the potential of lowering your interest rate (not available with the Direct Consolidation Loan) as well as changing the repayment options and length of repayment. This may seem like an obvious choice, if you can lower your interest rate, but there are other financial implications of leaving the federal student loan program that should be considered before making the decision to do so.
Compare Top Refinance Lenders
- Actual prequalified rates from multiple lenders in 3 minutes.
- Checking rates on Credible is free and will not impact your credit score.
- Refinance federal, private and ParentPLUS loans.
- You could lower your interest rate or reduce your monthly payment.
- Refinance $5,000 up to the full balance
Student Loan Refinancing Rate and Terms Disclosure:
The lenders on the Credible.com platform offer fixed rates ranging from 3.85% - 12.10% (3.85% - 12.10% APR). Variable interest rates offered by the lenders on Credible.com range from 4.70% - 13.44% (4.70% - 13.44% APR). Variable rates will fluctuate over the term of the borrower's loan with changes in the Index rate. The Index will be either LIBOR, SOFR, or the Prime Rate of interest as published in the Wall Street Journal (WSJ). The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Rates are subject to change at any time without notice. Your actual rate may be different from the rates advertised and/or shown above and will be based on factors such as the term of your loan, your financial history (including your cosigner’s (if any) financial history) and the degree you are in the process of achieving or have achieved. While not always the case, lower rates typically require creditworthy applicants with creditworthy cosigners, graduate degrees, and shorter repayment terms (terms vary by lender and can range from 5-20 years) and include loyalty and Automatic Payment discounts, where applicable. Loyalty and Automatic Payment discount requirements as well as Lender terms and conditions will vary by lender and therefore, reading each lender’s disclosures is important. Additionally, lenders may have loan minimum and maximum requirements, degree requirements, educational institution requirements, citizenship and residency requirements as well as other lender-specific requirements.
Splash Financial Refinance Loan
Splash Financial negotiates with credit unions and banks to provide low refinancing rates to student loan borrowers.Splash is a student loan refinance company that negotiates with credit unions and banks to provide market-leading rates. Our sole focus is helping graduates save money through student loan refinancing – it’s the only product we offer!
The Splash Financial Refinance Loan Offers the Following:
- Rates as low as 4.74%1 Variable APR and 4.96%1 Fixed APR
- See your rates in 3 minutes without affecting your credit score2
- No pre-payment penalties, origination, or application fees
- Minimum loan amounts starting at $5,000 and no loan maximums
- Special terms for Medical and Dental Residents and Fellows
Minimum Eligibility Requirements
- Graduates with an associate, bachelor’s or graduate degree
- Parents who took out educational loans to finance their child’s education are also eligible if the child has graduated
- Borrower must be a U.S. citizen or permanent resident
- 650+ FICO
- <50% Monthly Debt-to-Income Ratio
Loan Limits
Minimum Loan Amount: $5,000
Annual loan maximum: No Maximum
1The rates displayed may include a 0.25% autopay discount.
2To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
ELFI Student Loan Refinance
ELFI is a nationwide student loan debt consolidation and refinancing program offered by Tennessee based SouthEast Bank. Offering among the lowest rates in the industry coupled with award winning customer service, it is designed to assist borrowers through consolidating and refinancing education loans to lower your cost of education and/or makes repayment very simple.
ELFI – backed by the strength of SouthEast Bank – combines the benefits of traditional education loan financing with the superior products, service, and support found in the private market.
1Average savings calculations are based on information provided by SouthEast Bank/ ELFI customers who refinanced their student loans between 01/03/23 and 03/01/23. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.
2Rates accurate as of 01/01/25. The interest rate and monthly payment for variable rate loans may increase after closing. Your actual interest rate may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10 year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. To qualify for refinancing or student loan consolidation through ELFI, you must have at least $10,000 in qualified student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary ELFI institution. ELFI Parent Loans are limited to a maximum of the 10-year term.
Earnest Student Loan Refinancing
New-fashioned loans for the next generation.
Earnest is a technology company using cutting-edge data science, smarter design, and software automation to rebuild financial services.
With a mission to empower people with the financial capital they need to live better lives, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company uses data and technology to understand every applicant's unique financial story and offer the lowest possible rates.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.19% APR to 9.23% APR (excludes 0.25% Auto Pay discount). Variable rates range from 6.13% APR to 9.98% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
*Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance. Not all borrowers will qualify for our lowest rates, and your rate will be based on creditworthiness at time of application.
The information provided on this page is updated as of 01/08/2025. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. or FinWise Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit www.earnest.com/licenses for a full list of licensed states. For California residents: Loans will be arranged or made pursuant to a California Financing Law License. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107.
Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.
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© 2024 Earnest LLC. All rights reserved.
THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.Don't get stuck with the standard student loan rate. You've worked hard; you deserve better. Learn how SoFi Student Loan Refinancing can help you put money back in your pocket:
- Check your rate in two minutes.
- See how much you could save.
- SoFi has refinanced over $30 billion in student loans for more than 450,000 members.
1Fixed rates range from 4.49% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Variable rates range from 5.99% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 11/20/24 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay and Direct Deposit are not required to receive a loan from SoFi. You may pay more interest over the life of the loan if you refinance with an extended term.
0.25% Direct Deposit Discount: Terms and conditions apply. Offer good for Student Loan Refinance (SLR) borrowers that apply for a new SLR on or after 9/17/2024. To be eligible to receive the 0.25% interest rate reduction offer: You must (1) Complete a Student Loan refinance application with SoFi beginning September 17, 2024; (2) Be approved by SoFi for the loan meeting all SoFi’s underwriting criteria; (3) Have either an existing SoFi Checking and Savings account, a SoFi Money cash management account or open a new SoFi Checking and Savings account within 30 days of funding the new loan, AND receive a direct deposit of at least $1,000 to the account within the first 30 days of funding the new loan ("Direct Deposit Account"); (4) Be the primary SLR account holder. If eligible at SoFi’s sole discretion, you will receive this discount during periods in which you have received direct deposits of at least $1,000 every 30 days to a Direct Deposit Account. This discount will be removed during periods in which SoFi determines you have not received at least $1,000 every 30 days in direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to obtain a Loan. This discount lowers your interest rate but does not change the amount of your monthly payment. SoFi reserves the right to change or terminate this Rate Discount Program to unenrolled participants at any time without notice.
College Ave Student Loans Refi was created to help graduates refinance existing student loans so they can repay their loans easily while reducing the total cost and/or monthly payment.
- No application or origination fees
- Variable rate range: 6.99% – 13.99% APR1
- Fixed rate range: 6.99% – 13.99% APR1
- Choose how long you take to repay the loan
Eligibility
- You (and your cosigner, if applicable) must be a U.S. Citizen or permanent resident.
- Must have graduated from a public or private, not-for-profit, degree granting institution
- Consolidate and refinance up to $300,0003
- All loans are subject to individual approval and adherence to underwriting guidelines.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
Information advertised valid as of 03/01/2023. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
Benefits of Student Loan Refinance
The biggest and most compelling reason to refinance your student loan(s) is to take advantage of lower interest rates than those you committed to when first accepting the loan. Lower rates could mean lower monthly payments, less money paid in interest overall and potentially paying off the loan sooner, should you opt to continue paying your same monthly payment with more money now going toward the principal bringing it down faster.
Another benefit of private student loan refinance is changing your loan terms. You could shorten or lengthen the loan repayment term of your loan to best suit your needs and ability to pay. Should you choose to lengthen the loan, keep in mind that more payments will mean more interest paid overall. However, if your current situation requires you to lower your payment by extending the repayment term, you could always increase your payments later (if finances allow) to put you back on track to pay it off sooner. Many student loans, even a private student loan refinance, should not have prepayment penalties—but check your terms and conditions to make sure!
Finally, if your parents or some other person cosigned to help you get a loan while you were in school, refinancing is one way to remove the cosigner from the commitment. If you can show you are a credit-worthy borrower capable of making the payments on your own, you can refinance the loan in your name alone. You can take this opportunity to go out on your own to help continue build your credit score and establish a strong credit history, that will help you further down the road should you decide to buy a car or home or other major purchase.
Don’t fret if you are unable to qualify on your own, you can ask another individual (like a spouse or sibling) to cosign your new private student loan refinance.
Considerations if Refinancing Federal Student Loans
If all or some of your loans are federal student loans, you will want to carefully weigh the pros and cons before choosing to take your loans out of the federal student loan programs. Federal student loans offer a variety of programs to help struggling students that private loans may not. For example, there are income-driven repayment plans and forgiveness plans offered for federal student loan borrowers that would otherwise be forfeited should you move your federal loans into a private student loan.
Ultimately you need to decide if the lower interest rate is worth more to you than the repayment options offered for federal borrowers. However, should you decide that saving money is more important and are willing to forego the federal benefits, there are several private lenders out there who will compete for your business, so make sure to do your research and compare each lender carefully before deciding on one.