Consolidation and Refinancing

Federal Loan Consolidation

Loan consolidation allows borrowers who have entered repayment to combine one or more federal education loans into a new loan having a fixed interest rate based on the weighted average of the interest rates of the loans being consolidated. The consolidation loan will be placed with one lender requiring one monthly payment. You'll be able to choose from multiple repayment plans with various terms. This payment may be quite a bit lower than your total monthly payments on multiple loans but do bear in mind that although consolidation can simplify loan repayment, it can increase the total cost of repaying your loans.

Advantages and disadvantages of consolidation:


  • You have the potential for lower monthly payments.
  • The interest rate is fixed for the life of the loan.
  • You may have flexible repayment options.
  • You'll have a single monthly payment for multiple loans.


  • If you include a Federal Perkins Loan in a consolidation loan, you may lose some cancellation benefits.
  • If you extend your repayment period, you may pay more interest over time.
  • You may have an earlier repayment start date if you consolidate during the loan's grace period.
  • Once a consolidation has been completed, it cannot be reversed—the original loans no longer exist, because they're paid off by the consolidation.

Contact your loan servicer with questions or find more information at

Private Loan Refinancing

If you utilized private student loans to pay for college, refinancing is one option to consider as you begin repayment. Refi loans combine all your private student loans and possibly federal student loans into one loan and one payment with an interest rate based on your current loans. This option may reduce the amount you pay and/or provide a more manageable monthly payment amount.

Please Note: If you combine federal loans with private loans, make sure you clearly understand any impact to losing federal loan repayment benefits.

Important information as you consider refinancing:

  • Identify all your current loans (lender, servicer, type of loan, type of interest rate, borrower benefits, repayment options, etc.)
  • Understand that you may need a cosigner to refinance your loans.
  • Refinancing is not always the best solution, so review the possible rates and overall costs to determine if this is the right choice for you.

Refinancing option for Indiana residents

INvested LogoINvestEd works with Indiana families to help them make responsible decisions in the refinancing process and offers refinancing options designed specifically for Indiana residents or students who attended an Indiana College.

Learn more about the > INvestEd Refi Loan > or > Apply now for a REfi Loan.

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