However, there are a few things to be aware of before you refinance fed loans.
We’ve gathered the most frequently asked questions from our blog and social media channels about federal student loan refinancing to help you decide whether it’s right for you. What’s the difference between refinancing and consolidating federal student loans?
Some private lenders also consolidate loans, but these cannot be consolidated with federal loans.
Federal loans can be consolidated during periods of repayment, grace, deferment, and forbearance.
Loans cannot be consolidated while the borrower is still in school.
The short answer is yes— you can refinance federal student loans with a select few private lenders, including So Fi.
This is great news for borrowers with high-interest rate federal unsubsidized or PLUS loans.
The interest rate on consolidated loans is often lower than what is currently paid.
Borrowers in default on a federal student loan are eligible for a consolidation loan if certain conditions are met.
When you consolidate federal loans through the Direct Loan Consolidation program, the resulting interest rate is the weighted average of the original loans’ rates, which means you don’t save any money.
If your monthly payment goes down, it’s usually the result of lengthening the loan term, which means you’ll spend more on total interest in the long run.
If you want to consolidate a defaulted loan, you have to either make satisfactory repayment arrangements on the loan with your current loan servicer before you consolidate, or repay your new Direct Consolidation Loan under the: The interest rate for federal loans is set according to a formula established by federal statute.