Consolidation and refinancing are different strategies, even though both can change how you manage multiple student loans. Consolidation generally combines eligible loans into a single loan, potentially simplifying repayment and creating one payment instead of several.
Refinancing usually involves taking out a new private loan to pay off existing student debt. It may offer a different interest rate or repayment term, but refinancing federal loans can mean giving up certain federal protections.
The better option depends on your goals. If simplifying multiple eligible federal loans is the priority, consolidation may be worth investigating. If reducing the interest rate is the main goal and you qualify for attractive private terms, refinancing may be worth comparing—but you should carefully consider what federal benefits you would lose.
Don’t compare only the monthly payment. Look at the total repayment cost, repayment period, and protections attached to each option. Our guide to student loan consolidation provides a useful starting point.
