And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Here’s how to choose a strategy — federal student loan consolidation, refinancing through a private lender or income-based repayment — that will make your payments more affordable.
Strongly consider lenders that offer the most flexibility on payments and multiple options for forbearance.» MORE: Student loan refinance calculator: Should I refinance?Federal loan consolidation doesn’t have a credit requirement, and it offers the benefit of a single loan bill and potentially lower payments.But it’s only for federal loans, and it won’t cut your interest rate.Consider federal consolidation if you: If you’re considering either federal or private student loan consolidation in order to get a drastically lower loan bill, look further into income-driven repayment instead.The government offers plans that cut payments to 10% or 15% of “discretionary” income and offer forgiveness on the remaining balance after 20 or 25 years. If you have a large loan balance and a low income, income-driven repayment is probably your best option for the lowest monthly bill.Not everyone is a good candidate for private student loan refinancing.Consider federal consolidation if you: Your new fixed interest rate will be the weighted average of your previous rates, rounded up to the nearest one-eighth of 1%.You’ll get a new loan term between 10 and 30 years, depending on your balance. A longer term also will result in paying more in interest.But you can always pay off your loan faster if possible, which will save money.If you’re considering either federal or private student loan consolidation in order to get a drastically lower loan bill, look further into income-driven repayment instead.