The truth is that lenders weight the average of the interest rates you're currently paying on your existing federal student loans and then round that number up to the nearest one-eighth of a percentage.
While the interest rate on the new loan may be lower than the higher interest rate, it will also be higher than the lower interest rate you're currently paying.
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At some point you may want to change how you pay off your student loans, and two terms may pop up while exploring options: consolidation and refinancing.
Although search results for one can surface when looking up one term of the other, there is a difference.
If you have private student loans at differing variable rates of interest, you may be able to consolidate and get one new loan with a fixed rate of interest—a good move if rates have dropped significantly since you were in school.
That's because you'll start the loan repayment clock again and it will probably be for a longer time.
Maximum Loan Amount: None Interest Rate: Weighted average interest rate on the loans being consolidated, rounded to the nearest one-eighth of 1 percent, not to exceed 8.25 percent.