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What’s the difference between consolidating and refinancing?

Although these terms are often used interchangeably, they actually describe two specific benefits of our loans. “Consolidating” combines multiple loans into a single loan and monthly payment, and “refinancing” creates a new loan with new terms, which may or may not reduce the interest rate. While you can generally consolidate and refinance, some people with just one student loan apply because they’re simply interested in refinancing and potentially obtaining a better interest rate that may result in lower monthly payments. Likewise, some people are interested in consolidating multiple loans, even if their interest rate doesn’t change, because they want the ease of one payment.