Best Student Loan Consolidation Companies

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Stanley Tate

#1 Student Loan Lawyer

Updated on November 2, 2022

There are two types of student loan consolidation: federal and private. Federal consolidation loans are offered by the government, while private consolidation loans are offered by banks or other lending institutions.

The main difference between the two types of loans is that you get to keep perks like student loan forgiveness and income-driven repayment plans if you consolidate federal loans with the government. You’ll lose those loan benefits if you consolidate or refinance federal loans with a private lender.

  • Federal student loan consolidation simplifies loan repayment by combining multiple federal loans into a new, single loan through the Education Department. Your new fixed interest rate will be the weighted average of your previous rates. You’re eligible for a Direct Consolidation Loan even if you have bad credit. The federal government doesn’t check your credit history as part of the application process.

  • Private student loan consolidation, or refinancing, lets you refinance your existing loans with a bank or online lender to get a lower fixed or variable interest rate. To qualify, you’ll need a good credit score (or a cosigner with one) and enough income to cover your expenses and the monthly payments for the new loan.

Learn More: Credit Score Needed to Refinance Student Loans

Editor’s Note: The interest rates in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as rates change. We’ll update as changes are made public.

6 Federal Student Loan Consolidation Companies

The Education Department outsources federal consolidation to private companies called student loan servicers. You can consolidate your loans into the Direct Loan Program for free on the Federal Student Aid website, studentaid.gov.

After you log in, you’ll be able to select one company below to process your consolidation application.

Do you work for the government or a nonprofit? MOHELA took over the administration of the Public Service Loan Forgiveness Program and PSLF Waiver for the Education Department from FedLoan Servicing. Choose MOHELA as your new servicer to make your payments count towards loan forgiveness.

Learn More: Can You Consolidate Student Loans More Than Once?

Aidvantage

Aidvantage replaced Navient last year as the servicer for federal loans held by the U.S. Department of Education.

  • Loan Types: Only federal student loans — Direct Loans, Parent PLUS Loans, Federal Family Education Loans, Perkins Loans, and Stafford Subsidized and Unsubsidized Loans.

  • Credit Check: No. All credit scores are accepted.

  • Fixed or Variable: Fixed interest rate.

  • Interest Rate: Based on the average rate of the loans in the consolidation.

  • Aidvantage website: aidvantage.com

Learn More: Aidvantage Student Loan Forgiveness

EdFinancial

  • Loan Types: Only federal student loans — Direct Loans, Parent PLUS Loans, Federal Family Education Loans, Perkins Loans, and Stafford Subsidized and Unsubsidized Loans.

  • Credit Check: No. All credit scores are accepted.

  • Fixed or Variable: Fixed interest rate.

  • Interest Rate: Based on the average rate of the loans in the consolidation.

  • EdFinancial website: edfinancial.com

Learn More: EdFinancial Loan Forgiveness

Great Lakes

  • Loan Types: Only federal student loans — Direct Loans, Parent PLUS Loans, Federal Family Education Loans, Perkins Loans, and Stafford Subsidized and Unsubsidized Loans.

  • Credit Check: No. All credit scores are accepted.

  • Fixed or Variable: Fixed interest rate.

  • Interest Rate: Based on the average rate of the loans in the consolidation.

  • Nelnet website: greatlakes.com

Learn More: Great Lakes Student Loan Forgiveness

MOHELA

If you choose MOHELA as your loan servicer, the consolidation process will be handled by Aidvantage. Once the consolidation is complete, Aidvantage will send the loan to MOHELA for servicing.

  • Loan Types: Only federal student loans — Direct Loans, Parent PLUS Loans, Federal Family Education Loans (FFEL), Perkins Loans, and Stafford Subsidized and Unsubsidized Loans.

  • Credit Check: No. All credit scores are accepted.

  • Fixed or Variable: Fixed interest rate.

  • Interest Rate: Based on the average rate of the loans in the consolidation.

  • MOHELA website: mohela.com

Learn More: MOHELA Student Loan Forgiveness and PSLF

Nelnet

  • Loan Types: Only federal student loans — Direct Loans, Parent PLUS Loans, Federal Family Education Loans, Perkins Loans, and Stafford Subsidized and Unsubsidized Loans.

  • Credit Check: No. All credit scores are accepted.

  • Fixed or Variable: Fixed interest rate.

  • Interest Rate: Based on the average rate of the loans in the consolidation.

  • Nelnet website: nelnet.com

Learn More: Nelnet Student Loan Forgiveness

OSLA

  • Loan Types: Only federal student loans — Direct Loans, Parent PLUS Loans, Federal Family Education Loans, Perkins Loans, and Stafford Subsidized and Unsubsidized Loans.

  • Credit Check: No. All credit scores are accepted.

  • Fixed or Variable: Fixed interest rate.

  • Interest Rate: Based on the average rate of the loans in the consolidation.

  • OSLA website: osla.com

Learn More: OSLA Student Loan Forgiveness

What is the best student loan consolidation company?

Of all the federal student loan servicers, Great Lakes and Navient are the best at processing consolidation applications accurately. In my experience as a student loan lawyer, I’ve found that they both have dedicated consolidation units with seasoned employees who are experienced at accurately consolidating loans and explaining issues blocking the consolidation from being funded.

While no company is perfect, both servicers have the fewest complaints registered with the Consumer Financial Protection Bureau relative to the number of student loan borrower accounts they manage.

Learn More: Read CFPB Report on Student Loan Complaint

Private student loan consolidation

Consolidating student loan debt with a private lender can save you money if your new loan has a lower interest rate. You’ll get the lowest rates and best loan terms if you have a strong financial history — credit score, educational background, job history, and income.

Consider refinancing your current loans if you have:

  • Private student loans.

  • A minimum credit score of 680.

  • A minimum income of $40 thousand.

  • A good debt-to-income ratio (typically less than 50%).

A cosigner can help secure the best rates if your creditworthiness is less than stellar. Read more about how to get a student loan cosigner release.

While you can refinance federal loans into a private consolidation loan, I advise most borrowers not to. What they’ll lose in the end — access to student loan forgiveness programs like Public Service Loan Forgiveness and the IDR Waiver — isn’t worth what they’ll gain in the short-term — a lower rate and lower monthly payments.

Learn More: How to Refinance Federal Student Loans

Best student loan refinance companies

Credible

Credible is an online marketplace for private student loans and student loan refinancing that provides personalized quotes from banks, credit unions, and online lenders. It makes shopping for the best student loan refinance rates easy by allowing you to submit one application without a hard credit check to get offers from several lenders simultaneously. Student loan refinancing rates range from 1.86% to 8.73% APR.

None of their partners charge loan application fees, origination fees, disbursement fees, or prepayment penalties.

Earnest

Earnest is an online lender that’s been offering student loan refinancing to borrowers with existing loans.

  • Repayment terms: Customizable loan terms from 5 to 20 years.

  • Interest rate types: Fixed and variable rate loans.

  • Refinance rates: 1.74% -7.99% annual percentage rate (APR).

  • Loan amounts: $5,000 to $500,000.

  • Rate discount: 0.25% autopay discount.

  • Pause payments: Borrowers can skip one payment every 12 months and pause payments temporarily with forbearance if they’re experiencing financial hardship. They can also put their payments on hold with a deferment if they return to graduate school at least half-time.

Citizens Bank

  • Repayment terms: Loan terms from 5 to 20 years.

  • Interest rate types: Fixed and variable rate loans.

  • Refinance rates: 1.99% – 8.72% with automatic payment discount.

  • Loan amounts: $5,000 up to $750 thousand, depending on the highest degree earned.

  • Rate discount: 0.25% autopay discount.

  • Pause payments: NA.

Laurel Road

  • Repayment terms: Loan terms from 5 to 20 years.

  • Interest rate types: Fixed and variable rate loans.

  • Refinance rates: 1.64% – 6.05% with automatic payment discount.

  • Loan amounts: $5,000 up to the total cost of attendance at an undergraduate or graduate school. Borrowers with associate degrees can refinance up to $50 thousand.

  • Rate discount: 0.25% autopay discount.

  • Pause payments: Borrowers can’t pause payments due to financial hardship or if they return to school.

LendKey

  • Repayment terms: Customizable loan terms from 5 to 20 years.

  • Interest rate types: Fixed and variable rate loans.

  • Refinance rates: 2.62% -7.93% APR.

  • Loan amounts: $5,000 up to $300,000, depending on the highest degree earned.

  • Rate discount: 0.25% autopay discount.

  • Pause payments: Borrowers can temporarily pause payments with forbearance.

SoFi

SoFi is an online lender that’s been offering student loan refinancing to borrowers with existing loans.

  • Repayment terms: Customizable loan terms from 5 to 20 years.

  • Interest rate types: Fixed and variable rate loans.

  • Refinance rates: 1.74% -7.99% APR.

  • Loan amounts: $5,000 up to the total loan balance owed on qualified education loans.

  • Rate discount: 0.25% autopay discount.

  • Pause payments: Borrowers who lose their job can pause payments temporarily with Unemployment Protection. They can also put their payments on hold with a deferment if they return to graduate school at least half-time.

Splash

Like Credible, Splash Financial is a student loan refinancing marketplace that uses its network of banks, credit unions, and other lenders to match borrowers with refinancing options. It also offers specialized programs for physicians seeking to refinance medical school loans.

  • Repayment terms: Customizable loan terms from 5 to 25 years.

  • Interest rate types: Fixed and variable rate loans.

  • Refinance rates: 1.74-9.51% APR.

  • Loan amounts: $5,000 up to the total loan balance owed.

  • Rate discount: 0.25% autopay discount.

  • Pause payments: Borrowers may qualify for a deferment or forbearance depending on the lender.

FAQs

Should I choose a variable or fixed interest rate?

There isn’t a correct answer for whether you should choose a variable or fixed interest rate. Variable rates typically start lower but will fluctuate throughout the repayment period. This means they may increase to more than the fixed rate you are offered. Fixed rates remain the same throughout the life of the loan.

Does student loan consolidation or refinance hurt your credit score?

Consolidating federal student loans doesn’t hurt your credit score. The Education Department doesn’t check your credit report as part of the application process. Private lenders do a hard credit check after you accept a preapproval offer and submit a full loan application. Read more: Will refinancing student loans hurt my credit?

Can you refinance after you consolidate a student loan?

You can refinance student loans after consolidation, but you’ll lose access to federal benefits like flexible repayment options and forgiveness programs.

Can you refinance student loans with bad credit?

If you’re looking to refinance your student loan with bad credit, work on improving your credit score before you apply. You will have a better shot at qualifying if you pay off debt, pay your bills on time, pay down credit card debt, and hold off on applying for other loans.

Is it possible to refinance defaulted student loan debt?

Most lenders won’t refinance defaulted student loans, but Yrefy works exclusively with borrowers who’ve fallen behind on their payments.

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