On the other hand, refinancing means replacing multiple student loans — private, federal or a combination of the two — with a single, new, private loan.Your lender will heavily weigh your credit score when it determines your new interest rate, though you can use a co-signer to get a better rate.It’s important to note that when you refinance federal loans into a private loan, you’ll lose the protections specific to federal loans.

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Here’s how the government determines the length of your repayment term: Consolidating your loans with the federal government is free.

If you see an ad, receive a letter, or get a phone call from a company that charges you a fee to consolidate, don’t respond.

Consolidate your loans through or by calling the federal Loan Consolidation Information Call Center at 1-800-557-7392.

You’ll get a new interest rate, which is the weighted average of all your prior loans’ rates rounded up to the nearest one-eighth of 1%.

(If the average comes to 4.26%, for instance, your new interest rate will be 4.375%.) Interest rates on direct loans are fixed, so your interest rate won’t change while you’re paying off the loan.

That’s different from a variable rate, which can go up or down based on market conditions.

The government will assign you a new repayment schedule based on your total federal loan balance when you apply for consolidation.

On its face, student loan consolidation sounds smart: Combine your federal loans so you have a single monthly payment to keep track of, rather than paying separate bills to different servicers. Our guide to consolidation will help you understand what it is, who it’s meant for, whether it’s the right choice for you, and how to apply.

Consolidating has both benefits and drawbacks, and because “consolidating” is sometimes used interchangeably with “refinancing,” it can be easy to confuse the two terms.

The difference between consolidating and refinancing How federal loan consolidation works When it makes sense to consolidate The downsides of consolidation How to consolidate your loans At Nerd Wallet, we use the word consolidation when we refer to combining your federal student loans into a single direct consolidation loan.

We’ll walk you through the consolidation process below.