Juggling the terms and varying interest rates of many student loans can be a problem. Student loan consolidation is a process that simplifies your loan repayment with one loan and one monthly bill.

There are 2 types of student loan consolidation: federal and private. Federal student loan consolidation is performed by the US Department of Education and only combines federal student loans. Private student loan consolidation or refinancing is done by private lenders and combines private loans or a mix of federal and private loans into one private loan.

Check out our guide to learn everything you need to know about consolidating student loans.

Consolidation of private student loans

When you start consolidating private student loans through private lenders, you are refinancing your loans. You combine your loans, whether federal or private, to benefit from a lower interest rate and reduce monthly payment terms.

Here are the steps to refinance your private student loan:

1. Choose a lender

There are many financial institutions that consolidate your student loans: banks, credit unions, and lenders specializing in these types of loans. Well known names include LendKey, Credible, and SoFi.

To start

securely via LendKey website

To start

securely via the SoFi website

To start

securely via Credible Loans website

2. Get pre-qualified online.

Most lenders will let you know if you are prequalified before you complete the full application.

3. Select your rate and duration.

You can choose to save on your monthly payment or save on total student loan interest.

4. Sign and accept your new loan.

In your application, you will need to provide documents such as proof of citizenship, identity and income, as well as information about the university, tuition fees, and financial aid. You can usually upload screenshots of your information and sign your documents electronically.

Best lenders for student loan consolidation

There are many lenders who specialize in consolidating student loans. You can choose between a fixed or variable interest rate. The fixed interest rates remain the same throughout the life of the loan. A variable interest rate will increase or decrease over time depending on economic conditions.

Take a look at our recommended lenders who offer some of the lowest interest rates.

To start

securely via LendKey website

To start

securely via the SoFi website

To start

securely via Credible Loans website

Student loan consolidation eligibility

Each private lender has different requirements for applying for a student loan consolidation. Be sure to check if you prequalify with the lender before submitting your application. Common criteria include:


Some lenders require you to be at least 18 years old. Others require that you are at least the age of majority in your state and that you can enter into a binding contract.


Most lenders require that you be a U.S. citizen, permanent resident, or visa holder with valid proof. If you are a non-permanent resident who does not have a valid visa, you will need to apply with a creditworthy co-signer who is a U.S. citizen or permanent resident.


Residence may be important to some lenders because they may be allowed to offer loans only in certain states.


Some lenders are particular about educational qualifications or levels. Lenders will often ask you to attend a Title IV school, which means your school processes federal student aid.

Credit check

Credit scores and income are very important to lenders. Lenders generally require high credit scores and a minimum income requirement. Higher scores and income tend to get better rates or higher loan amounts.

Consolidation vs. Refinancing

Student loan consolidation and refinancing may sound similar, but they are fundamentally different. Each strategy has its advantages.

Take a look at the main differences between loan consolidation and loan refinancing.

Consolidation of student loans Student loan refinancing
What it is Combine multiple federal student loans into one loan Combines all existing student loans (federal and private) into one loan
Number of payments in a month 1 1
Interest rate Cannot lower or increase the interest rate May lower the interest rate to reduce the monthly payment or increase the rate to pay off the loan faster
Type of loans available Limited to federal loans only Private and federal loans
Flexibility Only fixed interest rate and fixed repayment period Possibility to choose between fixed and variable interest rates
Credit score requirement Fair credit rating Strong credit rating
Benefits and protections for borrowers Access rebate programs and loan protections No benefit or protection

Federal student loan consolidation

You can consolidate your federal student loan online through the Federal student aid website. You can also download and print a paper application to submit by US mail.

Here are the steps to follow when applying:

  1. Gather the documents listed in the “What do I need” section before you begin
  2. Enter the loans you want to consolidate
  3. Choose a repayment plan
  4. Read the terms
  5. Submit a request

After submitting your application, the consolidation service you selected will take the required actions to consolidate your eligible loans.

Continue to make payments on the loans until your consolidation agent tells you that they have been paid off by your new direct consolidation loan.

When to Consolidate Federal Student Loans

You can consolidate your federal student loans after you leave school or graduate, leave school, or go below half-time enrollment.

There are many reasons why you might want to consolidate your federal loans. Here are a few to consider:

Streamline payments

You have multiple federal student loans from different loan officers and want to combine them into one loan with one monthly bill.

For example, you can consolidate 3 loans from different loan services and change the 3 separate interest rates to 1 weighted average interest rate. Your interest rate will be rounded to the next ½ percentage. For example, if your weighted average is 7.41%, it will be rounded to 7.5%.

Increase in repayment term

You want to reduce your monthly payment by obtaining a longer period (ranging from 10 to 30 years) to repay your loans.

Federal benefits and protection

You can access the Public Service Loan forgiveness (PSLF) and income-based repayment plan options.

For example, if you want to reduce your monthly payment amount but are concerned about the impact of consolidation, you may want to consider deferral or forbearance as options for short-term relief. For long-term payment relief, you can get an income-based repayment plan.

Fixed interest rate

The interest rate remains the same throughout the fixed period. It gives you a predictable monthly payment, usually for the life of the loan.

Final result

Student loan consolidation is a process that allows you to take out a new loan, which is then used to repay your student loans. Federal loan consolidation and private loan consolidation can help you streamline and lower your monthly payment.

If federal loan protections, repayment options, and forgiveness programs are important to you, a federal student loan consolidation should be right for you. If you have a great credit rating and a stable income, consider refinancing your loans with private lenders for better interest rates.

Get started today with our recommended lenders to consolidate your student loans.

Lend-Growth offers 5, 10, 15, 20 and 25 year student loan refinancing terms with fixed rates as low as 2.80% APR and variable rates as low as 1.89% APR.

Lend-Grow also pays off your loan – 0.10% APR every month for 3 years! Here’s what that means: Lend-Grow deposits 0.10% of the APR of your funded loan amount each month for up to 3 years (as long as your account is active) with repayment rewards.

Lend-Grow deposits the payback reward directly to the loan account you specify when registering for the payback reward. The repayment reward is not a rate reduction and you must continue to meet your full payment obligations with the lender each month.