Finishing your college education and finally having your degree in hand is a gratifying experience. But no matter how long ago you may have graduated, you might have funded your education with several federal and private student loans, which means you’ve been making more than one loan payment each month. Plus, each payment may be due on a different date and have a different interest rate. To simplify the process and save money, consider student loan consolidation.

What do I need to know?

In loan consolidation, your lender essentially buys all of your loans from the original lenders and reissues you with a new loan for the combined total. This process resets the terms of your loan (the length you have to pay it back, the interest rate, etc.). This could give you more time to repay the loan, at a lower monthly payment.

Which loans can be consolidated?

Both private student loans and federal student loans are eligible for consolidation. Federal student loans can be consolidated through a program offered by the Department of Education at no cost.

Some private lenders offer loans that allow students to consolidate federal and private student loans together, but you may want to think twice before doing this. Federal student loans that are consolidated with a private lender can lose borrower protections (such as deferment and forbearance) and aren’t eligible for Public Service Loan Forgiveness.

Multiple student loans may be consolidated through a single lender so you don’t have to worry about making multiple payments each month. This is a great option for anyone struggling to keep up with the different due dates and interest rates of their private and federal student loans.

When should private student loans be consolidated?

If your credit score has improved since you first obtained your loans, it may be a good time to consider consolidation. You may be able to receive a better interest rate on your consolidated loan now that your credit history has improved. Loan consolidation programs are best suited for people with strong credit and large loan balances looking to streamline payments or lower monthly bills. Although there are many positives to loan consolidation, it isn’t right for everyone. If your payments are manageable and all of your loans are held by the same lender, private loan consolidation may not make much sense for you.

If student loan consolidation sounds right for you, you have access to our competitive consolidation loans as a Navy Federal member. We may be able to help you save time and money by combining your outstanding student loans.