Consolidate Student Loan Debt: 4 Easy Tips To Successfully Refinance

graduate contemplating how to consolidate student loan debt

4 Tips On How To Consolidate Student Loan Debt

Are you wondering if its possible to consolidate student loan debt?  You may not be aware but, student loan debt plagues more than 40 million Americans. In addition, nearly 70% of students who earn a bachelor’s degree graduate with debt. In fact, with over $1.2 trillion in outstanding student loans, students are doing everything to reduce their exposure.

student reading book

Are you ready to lower your student loan debt? These four tips on how to consolidate student loan debt can help provide the financial relief you’re looking for:

Apply for Federal Student Loan Debt Consolidation

Federal Student Loan Debt Consolidation can turn multiple federal student loans into one. As the name implies, this option is only available for federal students loans.

One of the biggest downsides of this type of consolidation is that you probably won’t get a lower interest rate. Rather, the benefit is that you have a single monthly payment rather than multiple ones.  This arrangement can be significantly easier on your finances.

You may also be able to switch from a variable rate to a fixed rate.  This could potentially save you money over time.

To get started, visit the Department of Education website and apply for consolidation.

Use a Loan to Pay Off Loans

A private loan consolidation, also known as student loan refinancing, requires you to apply for a new student loan and use the funds to pay off existing student loans.

For many students, this option usually means a lower monthly payment. The terms of the new loan depends upon the borrower’s creditworthiness. If you’ve built up good credit, you may be able to acquire a more attractive interest rate.

You can use this type of loan for both private or federal student loans. If you currently have a variable interest rate, this may be your best chance at switching to a fixed rate.

There’s a Downside to Extending Your Loan Repayment Term

Extending your repayment terms can lead to lower payments. However, keep in mind that regardless of how much you’re paying, eventually you will need to repay the full amount.

feet looking over the edge

The longer you extend your terms, the more you’ll be paying interest over time.

It sounds attractive to lower your monthly payments, but it’s important to understand this option also has a price. So, make sure to do the math to make sure you can live with the amount you’re really paying.

Only Use Trusted Lending Institutions

Student loan debt is a hot topic today, with millions of students and their families struggling with the cost. This desperation has led to nefarious lenders and shady websites to offering student debt relief.

As tempting as it might sound to lessen your debt, be wary of offers that promise to lower your payments. Not knowing the credibility of these companies, they may charge fees that won’t save you any money.

Rather, apply for loan consolidation through a trusted lender. It usually doesn’t cost anything to refinance your student loans, unlike mortgages, to give you the maximum benefits.

If student loans are killing your finances, take comfort in knowing there is something you can do to lessen it. For more information on taking control of your financial future, spend more time on our blog.

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  1. Hi Patrick,

    I’ve got over $30k in student loan debt and have often stressed about paying it off. I’ve wondered whether to consolidate the debt or to keep them as they are and just pay them off.

    Thanks for the info and recommendations about the benefits of consolidating the loans.

    Do you have a preferred way of paying off student loan debt?

    Is it better to use a private loan or a federal student loan consolidation?

    • Hi Cameron,

      That’s a lot of student loan debt, but if it makes you feel any better there are graduates with a lot more. Sometimes into six figure territory!

      $30K seems manageable to me so don’t get too stressed.

      I’m assuming you have multiple loans, so consolidating is the best way to go.  A private loan consolidation should work out best, as opposed to the federal student loan consolidation, if you have good credit.

      Both are good options, but a private loan you will get you a lower interest rate. Just be careful not to extend the term if possible. If you can afford the higher payments, a shorter term will get you to where you want to go faster.

      Best of luck!

  2. I’ve been interested in this topic for awhile, as my wife and I carry some student loan debt that we’ve actually been carrying for several years.

    I like the options you laid out here. I’ve never actually looked into federal consolidation, but it sounds like that may be a really good option for us, as we do have federally backed loans. 

    I appreciate the information you’ve laid out here. I get what you’re saying about extending the loan, but saving on overall monthly payments, while reducing interest rates is pretty dang appealing to me. 

    Thanks for the post, and keep them coming!

    • Hey Adam,

      Looks to me like you are doing all the right things.

      If you can get a federal consolidation loan, you’re on the right track to paying off your student loans early.

      Just be careful. There is risk that comes with trying to lower your payments, but extending the term.  You’ll end up paying more with more interest over time.

      If you can consolidate your student loans, reduce the interest and the term you will be much better off in the long run.

      All the best.

  3. It seems like the entire world is currently in debt including most college students.

    However, I don’t think that it’s wise to take out a loan, unless you are in a really desperate position.

    Once you start dealing with banks and credit card companies, they won’t let you escape easily, they need poor people like us to keep the minimum payment game going.

    Nice tips on how to consolidate student loan debt. I’m trying to stay away from as much student debt as possible, so I’m hoping I’ll never have to consolidate.

    Great article.  This should be very helpful information for students who have several loans from different sources.

    • Interesting perspective.  I guess if you have cash sources or intend to work your way through college, you might be able to avoid student loan debt.

      For most who want a college education they are faced with committing to some student loan debt.  It’s an expensive endeavor and ends up being quite costly, forcing you to find loans from different loan programs.

      Most people get their student loans from a bank or through Federal Loan programs.  When they graduate, its probably a good idea to consolidate their student loans. They could end up saving thousands of dollars in the process.

      If a student has resources they should definitely use them first, then resort to some form of student loan debt to get them the rest of the way. 

      Having a college education today is extremely important if you want to raise your life time earnings.

      Thanks for your comments.

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