You can consolidate private and federal student loans into one policy through refinancing. This entails consolidating student loans by getting a new private loan to pay off your existing loan balances.
Refinancing may be an ideal option if you currently have better credit than when you first got your loans, meaning you could qualify for better rates this time around. However, you will lose any federal student loan benefits you have when you combine them with private student loans.
Consider the following advantages and disadvantages of consolidating private and federal student loans.
Refinancing would make financial sense if you prioritize saving money. Here are some reasons why a borrower would choose this option:
Refinancing may not be your best option if you intend to utilize federal student loan benefits. Consolidating private and federal student loans means getting a new private loan, meaning you will lose the following federal student loan benefits:
Yes, you can consolidate private and federal student loans through refinancing. Doing so means getting a new private student loan to pay off your existing student loan debt. As such, you would give up federal benefits because private lenders may not honor the same benefits in their institution.
You may consider refinancing if federal student loan benefits do not apply to your case. With a new private student loan, you may qualify for better rates. Accordingly, you could lower your monthly payments and reduce the time it takes to completely pay off your student debt, assuming that you are in a better financial condition and have higher credit scores this time.
Be sure to review your situation and confirm whether your federal student loans qualify for certain benefits before consolidating. Also, consider speaking with student loan advisors who can assess your financial and credit situation to determine whether refinancing is your best option.