How Credit Score Affects Student Loan Refinance And Consolidation

What's the difference between refinance and consolidation

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Student loan consolidation and refinancing are two of the most popular solutions that students turn to in order to better manage their loan payments. However, both refinance and consolidation work differently from each other.

How Credit Score Affects Student Loan Consolidation

Consolidating your loans means you are simply combining multiple existing loans into a single consolidated loan. The main goal in doing this is would be to simplify your monthly payments. The interest rate on a consolidated loan is not affected by your credit score. It is simply calculated as the weighted average of your existing loans.

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How Credit Score Affects Student Loan Refinance

You may be wondering if or when to refinance your student loans. With refinancing, you are actually replacing one or more existing loans with a completely new loan. You may opt to refinance to lower your monthly payments or to take advantage of lower interest rates. Whatever the reason you want to refinance your student loans, a private lender will only approve of your application if you are a responsible borrower. The only way to determine this is by checking your credit score.

With a good credit score lenders will not only approve of your refinance request more easily, they will also offer you the new loan at a lower rate of interest. Different lenders may calculate this new reduced interest rate differently so if you have a good credit score, it is a good idea to check with multiple lenders and choose one that offers you the lowest interest rate on your refinanced student loan.

 

Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.74% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
VISIT EARNEST
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
VISIT LENDKEY
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
VISIT CREDIBLE
Laurel road company logo.
Variable APR: 1.89% - 5.90%*
Fixed APR: 2.50% - 6.00%*
Undergraduate and Graduate
VISIT LAUREL ROAD
Commonbond company logo.
Variable APR: 1.98% - 7.04%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
VISIT COMMONBOND
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
VISIT ELFi

*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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