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How to Consolidate Your Student Loans in 2023

March 20, 2023

Consolidating your student loans allows you to combine multiple loans into one. Not only does this make your monthly payments more convenient, but it can also save you money with better interest rates.

There are two main options for student loan consolidation: federal student loan consolidation and private student loan refinancing.

There’s never been a better time to consider consolidating and refinancing your student loans. Interest rates are historically low right now, but they’re on the verge of going up – so it’s a good idea to take advantage of the situation while you can.

Let’s take a look at both consolidation options to see which one is right for you.

See Your Rates on Credible

Federal Student Loan Consolidation

If you have multiple federal student loans, you can combine them into one Direct Consolidation Loan through the U.S. Department of Education. If you do this, your total balance stays the same, but you’ll get a new interest rate that is the weighted average of the existing rates.

Though you won’t get a better rate, you can extend your repayment term to lower your monthly payment.

One main benefit of federal student loan consolidation is convenience: you’ll have just one monthly payment moving forward instead of several. This type of consolidation is available for most types of federal student loans if you’ve graduated or left school.


  • You’ll be able to keep the benefits that come with federal student loans, such as loan protections, repayment options, and access to forgiveness programs.
  • You can reduce your monthly payment by extending your loan term (but this means you’ll be paying it off for longer)
  • You can switch from a variable rate to a fixed-rate loan.


  • Federal student loan consolidation is only available for federal student loans – you cannot consolidate private student loans.
  • Your interest rate stays the same (weighted average).
  • You may lose progress payments towards loan forgiveness.

Private Student Loan Refinancing

With the Federal Reserve on the verge of increasing interest rates across the board, now is the perfect time to refinance your student loans and lock in a lower interest rate.

With private refinancing, you can consolidate federal loans, private loans, or a combination of both into one new private loan with better rates and terms.

This can lower your monthly payment and reduce the total amount you owe over the life of the loans. You can also potentially extend your repayment terms to reduce your monthly payment even more. As long as your credit score is at least 670 (for most lenders), you have a steady income, and a debt-to-income ratio of 50% or less, you should be able to qualify for refinancing.

If you want to see what kind of interest rate you could get, it’s easy to check on Credible. You can fill out the application form with no effect on your credit score and compare rates and terms from multiple lenders.


  • You can get a lower interest rate and lower your monthly payments
  • You can consolidate both federal loans and private loans
  • The payback terms are flexible


  • You may lose federal loan protections like payment freezes and loan forgiveness
  • More stringent eligibility requirements

See Your Rates on Credible

At a Glance: Federal Student Loan Consolidation vs Private Student Loan Refinancing

Federal Student
Loan Consolidation
Private Student
Loan Refinancing
Can you consolidate federal loans? Yes Yes
Can you consolidate private loans? No Yes
Will you have one monthly payment? Yes Yes
Can you keep federal loan benefits? Yes No
Can you lock in a better rate? No Yes
Is there a minimum credit score requirement? No Yes
Swipe for more

4 Steps to Get a Student Loan Refinance

1. Shop Around and Get Rate Estimates

It’s best to start by researching multiple lenders. Although they might seem alike, each lender has different features. For example, if you didn’t graduate, you’ll need to find a lender that doesn’t require a completed degree. You can compare offers from multiple lenders side by side on Credible.

Next, you’ll get rate estimates by prequalifying. This requires a soft credit pull and won’t impact your credit. Most lenders ask for basic information, such as:

  • Name
  • Address
  • Income
  • Monthly housing cost
  • Total student loan debt
  • University and degree

2. Pick a Lender and Loan Terms

As you get offers from different lenders, you’ll see fixed and variable interest rates, as well as a range of repayment terms. A variable interest rate usually provides a lower rate to start, but after a certain period, that rate can fluctuate. A fixed interest rate stays the same throughout the life of the loan.

Most people choose the lender offering the lowest interest rate. You may want to consider any other discounts, like autopay or loyalty discounts, before deciding.

3. Collect Documentation and Apply

When you’ve made a decision on your lender, you’ll complete an application. Most lenders require some documentation, including a government-issued photo ID, social security number, federal and private loan statements, and proof of income.

4. Wait for Approval and Loan Payoff

Once your application is complete, you’ll continue making your payments as usual while you wait for approval. This usually takes about 3 weeks, though it varies by each lender. When your new lender confirms approval, it will pay off your existing lender(s) and you’ll begin making payments to your new lender.

See Your Rates on Credible

The Best Lenders for Student Loan Refinancing in 2023


As an online loan marketplace, Credible lets you quickly compare rates from multuple lenders so that you can get the lowest rates possible. Filling out the application form has no impact on your credit score.

You can refinance all types of student loans including federal, private, undergraduate student, graduate student, and more. Refinancing rates from Credible range from 1.74% to 8.23% APR with terms ranging from 5 to 20 years.

Credible is so confident that you won’t find better rates anywhere else that it offers a $200 Best-Rate Guarantee. If you find a better rate with a different lender, Credible will give you $200 to make up for it, so you’ve got nothing to lose!

See Your Rates on Credible

Splash Financial

Splash Financial is another online loan marketplace that connects you with a network of lenders eager to land you as a client. Fixed rates start as low as 1.99%, and variable rates start at 1.74%. These rates include a 0.25% autopay discount.

The application process is easy, and there are no application fees. With Splash Financial, you also won’t have to pay any origination fees or no pre-payment penalties.

See Your Rates on Splash Financial

Citizens Bank

Citizens Bank is a direct lender offering student loan refinancing. It also has one of the highest autopay discounts in the industry, at 0.50%. This helps to make up for its 2.59% fixed and 1.99% variable minimum rates.

Citizens Bank also lets you release a cosigner after you make 36 consecutive on-time payments, which is something you won’t get with all lenders.

See Your Rates on Citizens Bank

The Bottom Line

Student loan consolidation and student loan refinancing are two different ways to combine multiple student loans into one. With either way, you’ll only have to make one monthly payment towards your student debt. You can also extend your loan term to reduce the amount you pay each month.

Consolidating your student loans through the government streamlines the repayment process and ensures you keep all federal loan protections and benefits. Refinancing, on the other hand, actually saves you money by allowing you to lock in lower interest rates while consolidating your loans into one manageable monthly payment.

You can use Credible to see the actual rates you can get. There’s no commitment involved, and it doesn’t impact your credit score.

See Your Rates on Credible


Is federal student loan consolidation right for me?

Federal student loan consolidation can be a good solution if you have multiple federal loans. It will allow you to streamline the repayment process, extend your repayment term, and keep the protections that come with government loans.

While it can be convenient, federal loan consolidation won’t give you a better interest rate, so it doesn’t actually save you money.

Is private student loan refinancing right for me?

Private student loan refinancing is the best option for you if you have multiple student loans of any kind and you want to consolidate them and get a better interest rate. If you aren’t planning on using any of the federal loan protections and programs, then there’s no reason not to refinance.

You can fill out the application form on Credible to see what kind of rates you can get.

Is this a good time to refinance my student loans?

Yes, now is the perfect time to refinance your student loans and lock in a lower interest rate. The Federal Reserve is planning on raising interest rates across the board soon, so you might never get the chance at interest rates this low again throughout the life of your loans.

Andrew Koopman
Written by
Andrew Koopman is a freelance finance writer. He's written hundreds of articles over the years, specializing in topics such as improving credit, paying off debt, and applying for loans. Andrew graduated from Miami University with a Master's degree in mechanical engineering. He loves watching sports and enjoying the great outdoors with his friends and family.