The application to refinance is similar to an application for a new loan and market rates and your financial profile determine the new loan's interest rate.
Both consolidating and refinancing can take away the headache of managing multiple student loans, but there are pros and cons to consider before you apply.
If you have both federal and private student loans, you will have to consolidate those types of loans separately. To guide you in making a decision about student loan consolidation, you can try a simple online assistant introduced by USDOE in the middle of 2012 to help students understand the basic principles of personal finance and apply that knowledge to their management of their student loans.
The assistant is called the Financial Awareness Counseling Tool (FACT), and it consists of a series of tutorials based on information from your own government loans, using that information to create a personalized analysis of your financial situation and offer appropriate advice.
You can apply to consolidate your federal student loans at Student
Pros: Refinancing combines your student loans into a single loan.
A cosigner is someone who shares responsibility with the borrower for repaying the loan.
The cosigner doesn’t have to be a relative; he or she can be any adult who meets the eligibility requirements.
However, if your choice lies between consolidating existing loans while paying more interest over time and falling behind in your individual loan payments, you should take the consolidation loan.
As you see, deciding whether consolidation is the right course for you depends not only on your current situation but also on the terms of the new loan. Department of Education (USDOE) has established a well-documented system of rules for federal student loan consolidation, and each private lender has its own guidelines for acceptable consolidation plans.
According to Edvisors, the average student loan burden for the undergraduate class of 2015 is ,000.