Best Student Loan Consolidation Companies

Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.

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For students who need to borrow money to finance their college education, it’s common to end up with multiple student loans. There are limits to how much you can borrow per year with federal student loans, and with private student loans you may not be able to borrow all that you need from just one lender. That’s where student loan consolidation can be a big help once you start repaying those loans. The deal you’ll get on a student loan consolidation depends heavily on the consolidation company you pick, and we’ve rounded up the very best.

Here are The Ascent's picks of the best student loan consolidation companies

Provider Rates & Terms Great For Get Started
Rates & Terms:

Fixed Rates: 3.49 - 8.36%

Variable Rates: 2.06 - 8.93%

Terms: 5, 7, 10, 15 & 20 years

Great For:
  • Low rates
  • No fees
  • Flexible term options
Get Started: Check Rate
  • Checking rates won't impact your credit score
Rates & Terms:

Fixed Rates: 3.46 - 5.98%

Variable Rates: 1.81 - 5.98%

Terms: 5, 7, 10, 15 and 20 years

Great For:
  • Low rates
  • Flexible term options
  • Discounts
Get Started: Check Rate
  • Checking rates won't impact your credit score

Earnest Student Loans Refinancing

Rates & Terms:

Fixed Rates: 3.5 - 7.89%

Variable Rates: 2.49 - 7.23%

Terms: 5-20 years

Great For:
  • Low rates
  • Discounts
  • Flexible loan terms
  • Checking rates won't impact your credit score
Rates & Terms:

Fixed Rates: 3.39 - 9.99%

Variable Rates: 2.8 - 9.72%

Terms: 5, 7, 8, 10, 15, and 20 years

Great For:
  • Best rate guarantee
Get Started: Check Rate
  • Checking rates won't impact your credit score

Laurel Road Student Loan Refinancing

Rates & Terms:

Fixed Rates: 3.5 - 7.02%

Variable Rates: 3.23 - 6.65%

Terms: 5, 7, 10, 15, 20 years

Great For:
  • Low rates
  • Term choices
  • Forbearance option
  • Checking rates won't impact your credit score
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How we picked the winners

When we compared student loan consolidation companies and chose our winners, our decision was based on a few key factors:

Low interest rates -- Although the primary reason to consolidate your student loans is to make them easier to manage, it doesn’t hurt to get a lower interest rate in the process. We looked for lenders with the lowest rates, including on both fixed-rate loans and variable-rate loans.

Large maximum loan amounts -- Since you use a consolidation loan to pay off several previous student loans, it’s important that the provider will lend you enough to pay off all the loans you have.

Flexible loan terms -- More flexible loan terms mean you’ll be more likely to get a loan for exactly as long as you want instead of needing to extend your loans longer than you’d like and pay more.

No frivolous fees -- The best student loan lenders have gotten rid of unnecessary fees, such as origination fees and application fees, so consolidation companies only made our list if they had done the same.

Forbearance options -- Having forbearance available can be a lifesaver if you go through a period where you can’t make your loan payments. While this wasn’t essential for a company to make our list, it did score some extra points for the companies that offered it.

What is student loan consolidation?

Student loan consolidation is when you get one new student loan to replace all your previous loans. You then pay off those other loans with the new one.

The reason you’d do this would be to only have one loan payment going forward. It can be inconvenient to make payments on multiple loans, and that’s where student loan consolidation can make your life much easier.

What’s the difference between student loan consolidation and refinancing?

The purpose of student loan consolidation is to go from multiple loans down to one, whereas the purpose of student loan refinancing is to get new terms on one or more student loans, be it a lower interest rate, a longer term, or a lower monthly payment.

There’s some confusion around student loan consolidation and refinancing, because people sometimes use the terms interchangeably. It is possible to both consolidate and refinance your student loans at the same time. For example, if you got one new loan with a lower interest rate to pay off all your other student loans, you’d be both consolidating and refinancing those loans.

Federal vs. private student loan consolidation

The two types of student loan consolidation are federal consolidation and private consolidation.

Federal consolidation is only an option with federal student loans, as you can’t consolidate private loans this way. To use this type of consolidation, you’d apply for a Direct Consolidation Loan through the U.S. Department of Education. The biggest advantage with federal consolidation is that your consolidation loan will be eligible for all the benefits of federal student loans, including:

  • Income-based repayment plans
  • Deferment and forbearance
  • Loan forgiveness

The drawback with federal consolidation is that your interest rate will increase a bit, so you’ll pay more overall on your loans this way.

Private consolidation works with both federal and private student loans. One thing to keep in mind is that if you use a private loan to consolidate federal loans, you’ll no longer be able to get any of those aforementioned federal loan benefits.

That being said, you could qualify for a lower interest rate with private loan consolidation if you or a cosigner have excellent credit. So if you don’t think that you’ll need those federal loan benefits, then private loan consolidation could be a good choice for all your loans.

The benefits of student loan consolidation

If you’re wondering why you’d want to consolidate your student loans, there are several benefits to doing so.

Fewer loans to manage -- Of all the reasons to consolidate student loans, the biggest is to not deal with a bunch of different loans anymore. By consolidating your loans, you won’t have multiple accounts to handle, which also means you’re less likely to miss a payment.

A lower interest rate -- If you opt for private loan consolidation and you or a co-signer can qualify for the best rates, then there’s a good chance you’ll be able to cut how much you’re paying in interest. That can save you a lot of money over the life of your loan.

A shorter or longer repayment term -- Consolidation is your opportunity to get a different repayment term for your student loans if you’d like. A shorter term may mean higher monthly payments, but you’ll also get your loan paid off sooner and save money overall. Even though a longer term means the loan will end up costing you more total, it will result in lower monthly payments, which can help if money’s tight.

How to consolidate your student loans

The process to consolidate student loans will depend on whether you’re using federal or private consolidation.

For federal student loan consolidation, you’ll start by filling out the Direct Consolidation Loan Application online. After that, your consolidation servicer will get in touch with you with the steps you need to take to finish the process.

If you’re interested in private student loan consolidation, you’ll need to:

  • Pick a consolidation company. To compare what kind of rates each company will offer you, go to their respective websites and complete a prequalification with all of them.
  • Apply for your loan through the company that you chose.
  • Once you’ve been approved and received your loan, use it to pay off your previous student loans.

Whether you go with federal or private student loan consolidation, you’ll need to keep making payments on your loans until the entire consolidation process is complete. After that, you can start making payments on your one consolidation loan.

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