If you have a lot of student loans don’t be concerned. You’re just like a lot of people who decided to take that plunge and go off to college. Very few people have the ability to take off for college and not have to take out any loans (those lucky people are the envy of the rest of us). But who cares if you’re just like everyone else right? Now you’re stuck with college loans you aren’t sure what to do with. First of all they’re expensive and second of all there’s probably just too many of them to keep track of. Well you’re actually in luck because one of your options is student loan consolidation and refinancing.

What is Consolidation?

When you consolidate something you are making it smaller. In this instance, you are taking all of your student loans and combining them into one larger loan. This means you only make one lump sum payment each month instead of having to make a payment for each of the loans that you took out. If you have even as few as two loan payments each month this can be a benefit. Who wants to keep track of all those due dates after all? Not me, that’s for sure. I would much rather have one payment each month because then I don’t have to worry about if I sent it in on time or if I paid all of them or just the first one.


Another benefit to consolidation is that you’ll actually get a longer period to pay off your loans and a lower payment. Consider this; you’re paying three different student loans with payments of $200, $300 and $350 each month. If you consolidate all those loans you will not be paying $850 a month. You’ll have a lower payment each month, you’ll pay one time each month and you won’t have to pay it off so quickly. This is especially great if you don’t have a lot of extra money available each month after paying off your other bills. It’s definitely something to keep in mind. After all, that little extra money may be all you need to get out from under some of your other debt at the same time.


Who is the Best?

There are actually a few different groups that have great interest rates and terms. These companies will allow you to consolidate multiple student loans which means a great benefit for you. However, it’s important to understand that they want to make money as well. You’ll have to pay them a specific interest rate to make the process of consolidation ‘worth it’ to the company. That doesn’t mean you should reconsider. In most cases you’re going to benefit greatly by consolidating your student loans even when you figure in the amount you’ll be paying in interest on those student loans once they have been consolidated. Keep this in mind when you’re looking at your options.


SoFi-Social Finance

This company offers refinancing as well as consolidation and does it at one of the lowest interest rates available. If you get a variable rate it could be between 2.66% and 5.035% (good luck trying to get those kinds of low rates on anything else anymore). Of course the catch is you need to sign up for autopay to get these rates and it could adjust just about any time up to 8.95% – 9.95% (which are still pretty good rates). If you get in for a fixed rate instead (also with autopay) your rate will be between 3.625% and 7.490%. There are no fees for paying off your loan early or for starting the program.


Charter One Bank

This bank offers fixed rates which start at 4.74% and variable rates starting as low as 2.3% (with some eligibility requirements of course). But you also get discounts if you have an account with the company, if you sign up for auto-pay and all kinds of other reasons as well which increase the worth of this benefit by a lot. You won’t have to pay any kind of fees such as application fees, origination fees, etc. You can also help out your co-signer by waiving their responsibility after 36 payments. So this is a beneficial option for many people.


Darien Rowayton Bank

This bank offers some great rates on fixed and variable interest though it does require you to be an alumni of certain programs. If you are a parent who took out loans for your child these can also be consolidated through this program as long as your child meets certain criteria such as working and having completed the degree program. You’ll be eligible for a 2.63% – 3.98% variable interest rate and a 3.5% – 6.25% fixed rate. If you sign on for a 5-15 year term you will have a rate cap of 9% (going up to 20 years brings you an interest rate of a whopping 18%).


It’s important to consider all of your options before you jump in with a student loan consolidation. You don’t want to spend too much paying off your loans but consolidating them can help you out a lot in the long run. You’ll spend less each month on the loan which means (if we take those same numbers from above) you could have an extra few hundred dollars every month. That can help you get rid of some of your other debt such as a car loan or a mortgage (or it could help you buy a car or a house of your own).


I was lucky enough not to need consolidation because I only needed one student loan. But that’s only because I finished my education at a bachelor’s degree and I managed to get some good scholarships. I can definitely say though that it’s much easier to pay off a small amount over a longer period of time. I’ve been able to get a car and we can make all our house payments too. So definitely consider the benefits.