First things first. Because of the way your credit score is determined, there’s a chance debt consolidation could actually improve your credit score. Not only will a lower monthly payment make it easier to pay your loan bills on time each month, but it will lower your debt-to-income ratio, too.

What are two advantages of consolidating your student loans?

The pros of student loan consolidation include easier debt management and potentially a lower monthly payment. Combining multiple student loans into a single loan with one monthly bill can help simplify repayment.

Does federal student loan consolidation affect credit score?

Federal consolidation doesn’t incur a credit check, so it won’t hurt your credit score. If you qualify, consolidating federal loans also gives you the freedom to get on an income-driven repayment plan or extended plan, which could make your monthly payments more affordable.

What are the cons of consolidating student loans?

Cons of Consolidating Student Loans. You may end up paying a higher rate of interest: If you consolidate your federal student loans and the new term is extended over a longer time period, you will inevitably end up having to pay a higher rate of interest overall.

Can You consolidate federal and private student loans?

It means you can consolidate your private loans — as well as your federal loans — with a private bank, credit union or online lender. Refinancing is an option if you have a credit score in at least the high 600s and a steady income, and are unlikely to need the safeguards of federal loans, such as income-driven repayment and loan forgiveness.

What’s the best interest rate to refinance a student loan?

When you refinance your student loans with a private lender, you receive one loan with one rate. Refinancing rates range from 3% to over 8%, with the lowest rates requiring excellent credit and stable income. Use the sliders below to see how changing the interest rate or term affects payments.