Student loan consolidation is a way to simplify your finances by combining multiple loans into one. There are two different ways to do it:
If you have federal loans, you might be able to do a direct loan consolidation:
Multiple federal student loans are combined into one loan with one monthly payment
Your interest rate will be the average rate of all the loans consolidated
This will make it easier for you to manage your loan, but you will pay the same amount of interest
You can refinance your loans with a private lender:
Multiple federal student loans are combined into one loan with one monthly payment
You will get a new interest rate based on your credit history and financial health
If you have federal loans, you will lose certain federal student loan protections such as public service loan forgiveness, income based repayment plans, or deferment and forbearance
You can potentially save money on interest