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Student Loan Refinance and Consolidation

Student Loan Refinance

Student loan refinancing offers borrowers the opportunity to pay off one or more existing loans with a new private loan. The advantages of refinancing can include securing a lower interest rate and/or lowering your monthly payments.

However, there can also be negative implications of refinancing, including the loss of any borrower benefits associated with your current loans (and particularly federal student loans), such as loan forgiveness/cancellation/discharge, temporary repayment relief (deferment/forbearance), or flexible repayment plans (income-driven repayment plans). Before refinancing federal student loans, borrowers should carefully consider the loss of these benefits.

When considering student loan refinance, ask yourself these questions: What is my primary objective? (ex. lower my total interest payments, lower my monthly payments, etc.) Are there fees for the loan refinance, and does paying those fees in exchange for a lower interest rate make sense? Will it take me longer, shorter, or the same amount of time to pay off my debt, and how will that affect my total loan payments? Student Loan Hero’s Student Loan Refinancing Calculator may be helpful in answering these questions.

We encourage students considering student loan refinancing to compare offers from multiple lenders. Credible provides a free student loan refinancing comparison tool that allows students and parents to compare prequalified rates from participating lenders, with no impact to their credit (think Priceline or Kayak but for student loan refinancing). Please note that Drake University has no control over the lenders who participate with Credible or the way in which Credible displays loan refinance products. To learn more, visit

Federal Loan Consolidation

Federal Loan Consolidation allows students with more than one qualifying federal student loan to combine those loans into a single new federal loan with an interest rate equal to the weighted average of the loans being consolidated. Loan consolidation may help to lower your monthly payment, but it may also result in you paying more in total interest.

Consolidation may cause you to lose certain borrower benefits—such as interest rate discounts, principal rebates, or some loan cancellation benefits—that are associated with your current loans. However, it can also make other federal student loans (such as Perkins, Health Professions, or FFELP) eligible for benefits associated with Federal Direct Loans, such as Public Service Loan Forgiveness and income-driven repayment plans.

More information and guidance about Federal Loan Consolidation is available at

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