Myth: Student Loan Consolidation is the Same as Refinancing

Student loan debt consolidation is different from refinancing

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Just because student loan debt consolidation and refinancing are often mentioned together, does not mean the terms are interchangeable. In fact, the two services are quite different.

Student Loan Consolidation

Consolidate: combine a number of things into a single or more effective whole. That is exactly what student loan consolidation does. It takes multiple student loans and combines them into a single loan—that means one monthly payment, one interest rate, one set of terms.

Students can consolidate all of their federal loans together, consolidate private loans, and even consolidate federal and private in some circumstances (though it must be done through a private lender). 

Consolidation is a great option for borrowers who want an easier time of managing their student loans.

Credibe company logo.

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Variable APR from 1.80% - 9.99% with auto-debit

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Student Loan Refinancing

Simply put, refinancing a loan means you’ll get a new interest rate and new loan terms. Refinancing is a way for students to make their loan better fit their personal situation. Borrowers could refinance and get a lower interest rate, meaning they save money long term. They could refinance for a lower monthly payment if the current amount is too high to manage. Or they could shorten their loan term by increasing monthly payments, to repay the loan sooner rather than later.

Unfortunately, the government can’t refinance federal loans. However, private lenders can refinance federal loans. Keep in mind though, you lose any federal benefits (such as student loan forgiveness).

Concerned about college costs? College Raptor’s free match tool can compare college costs and show you how much you can save at nearly every college in the United States!


Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.74% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.89% - 5.90%*
Fixed APR: 2.50% - 6.00%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.98% - 7.04%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 6.22%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 6.52%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.79%*
Fixed APR: 2.99% - 4.89%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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