Student Loan Consolidation
Know the difference between Federal consolidation and private refinancing
Direct Loan Consolidation (Federal)
- Multiple federal education loans are combined to create one loan and one monthly payment.
- Interest rate is determined by the average rates of all loans being consolidated
- You may be able to extend the length of your loan. This can result in lower monthly payments, however you may end up paying more over time.
- In general, this type of consolidation will add convenience, but is not a money-saving option.
CommonBond Refinancing (Private)
- Multiple federal (and private) education loans are combined to create one loan and one monthly payment.
- A new interest rate is calculated, based on your credit history and overall financial health.
- On average, CommonBond members save $15,114 by refinancing to a lower rate.6
- Note: when you refinance federal student loans with a private lender, you forego federal student loan protections, such as public service forgiveness and income based repayment plans.