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Not everyone is a good candidate for private student loan refinancing.

Federal loan consolidation doesn’t have a credit requirement, and it offers the benefit of a single loan bill and potentially lower payments.

However, when you refinance federal loans, they’ll become private loans and will no longer be eligible for federal programs, including income-driven repayment plans and forgiveness programs.

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Federal student loan consolidation doesn’t involve a credit check, you may be able to lower your monthly payment and there could be other benefits, such as being eligible for more repayment plans or forgiveness programs.

With private student loan consolidation, a private lender repays your student loans, which may include private and federal loans.

Consolidating or refinancing student loans are two popular options that could help you manage your payments, save money and open up additional options for loan forgiveness and repayment.

This guide provides an in-depth explanation of the differences between federal loan consolidation and private loan refinancing, the pros and cons of each and insight into which options are best for different situations. News compared private lenders to come up with recommendations for different kinds of borrowers.

This is because you’ll finance the new student loan based on a variety of factors, including your income, debts, employment and credit.

By contrast, federal loan consolidation won’t change how much interest accrues, and eligibility doesn’t depend on your creditworthiness. You can consolidate your federal student loans and refinance your private loans, or consolidate some of your federal loans and refinance others.The application takes most borrowers less than 30 minutes, according to the Federal Student Aid website. You must complete the application in a single session, so gather the documents listed in the “What do I need? 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.If you have private loans only, or you don’t plan to take advantage of those federal protections, compare refinance lenders to get the lowest possible rate.Strongly consider lenders that offer the most flexibility on payments and multiple options for forbearance.Most, but not all, federal loans are eligible for the program.

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