Is consolidating student loans good for credit score
And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Our partners cannot pay us to guarantee favorable reviews of their products or services. " At Nerd Wallet, we strive to help you make financial decisions with confidence. There are two types of student loan consolidation: federal and private.
We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research.
» MORE: Should you refinance federal student loans Like the federal government, private companies offer the option to consolidate multiple student loans into one.
When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%.
So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.
But unlike the federal government, they can consolidate both federal and private loans.
The goal with this process is not only to get the ease of a single payment, but to receive a lower interest rate based on your financial history.