July 27, 2021

Can You Consolidate Private Student Loans?


Consolidating student loans offers several benefits. Most notably, it allows you to make just one monthly payment towards all of your loans, rather than several payments. This makes it much easier to keep track of your loan repayments.

Additionally, consolidating your student loans can open the option for additional loan repayment plans and forgiveness programs. All these benefits make student loan consolidation an ideal solution.

Take note, though, that if you have private student loans or both private and federal loans, the benefits you receive can greatly differ.

Consolidating Private vs Federal Student Loans

First, can you consolidate private student loans? Yes, absolutely. If you have both federal and private student loans, you can even combine both into one loan with just one monthly bill.

However, consolidating private student loans is referred to as student loan refinancing. Student loan consolidation is used only when referring to combining federal student loans.

Student loan refinancing is done through private lenders. It is referred to as refinancing because you basically take out a new loan replacing or equivalent to the total amount of your multiple private student loans.

Benefits of Student Loan Refinancing

Refinancing private loans and consolidating federal loans seem the same when looking at the big picture — you get to combine your loans and make just one consolidated payment towards all your student debt.

However, there are small differences between the two, particularly in terms of benefits.

One major benefit when refinancing student loans is that you can save some money if you qualify for a lower interest rate on your loan refinancing. In contrast, it isn’t possible to lower your interest rates when consolidating federal loans.

In fact, consolidating federal loans raises your interest rate. This is in exchange for making lower payments and extending the term of your loan.

An advantage when you only have to combine federal loans, though, is you have more repayment options. Federal consolidation also gives you access to federal loan protections and forgiveness programs.

When To Refinance Private Student Loans

Ideally, you should first check your credit score and financial history before going ahead and refinancing your private student loans. This includes going over your income, educational background, and job history.

A healthy financial standing will net you a better interest rate when you do go through with refinancing. You will need a credit score of at least 600 to qualify for lower interest rates. Depending on your credit score, you may receive interest rates between 2% and over 9%.

Anyone with more than one private student loan would greatly benefit from refinancing. However, if you want to maximize your benefits, you will need the following as well:

  • A stable career or good job history
  • Excellent credit score, ideally 690 or higher

If you feel you do not qualify for either of these two criteria, you can also ask for someone to co-sign the loan for you. For this method, you will need to ensure that your co-signer meets both criteria.


Refinancing your private student loans is a heavy undertaking and requires much thought. Once you have decided on going through with it, though, make sure to shop around first.

Take a look at the current rates from various private refinancing lenders to ensure you get the best rates possible. Moreover, do due diligence and make sure the private lender you chose is trustworthy.

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