A consolidation loan is a loan which pays off all of your existing student loans, creating one single larger loan.
The interest rate of the new loan is a weighted average of your prior loans.
The company offers an interest rate discount of 25 basis points (0.25%) if you sign up for auto-pay.
Signing up for auto-pay is easy and So Fi’s customer service support staff can help you through the process if you run into any trouble. If interest rates do happen to rise, variable interest rates will be capped at 8.95% to 9.95% APR.
In that sense, it is much like a refinance, but is still called a consolidation loan. Federal loans are consolidated with a federal consolidation loan, which retains the repayment options provided by the Department of Education. For federal consolidation loans, there is no credit requirement, and you have the right to consolidate only one time during the life of your loan.
It is free to apply and the process usually takes about 15 minutes. You may now have a general idea of how to refinance student loans and how to consolidate student loans, as well as the basics of what each lender offers, but there is much more information you should know before choosing a lender.
There are many different benefits and drawbacks of what each student loan consolidation and refinancing lender offers, and it is important to be aware of all of them.
Often, school administrators and loan servicers push you to consolidate as soon as possible.
Whether you should consolidate your federal student loans depends on a number of factors including, whether you are in default and want to get out, what types of loans you have, and whether consolidation can make your loans eligible for repayment plans that you wouldn't otherwise be able to take part in.