You will not want to consolidate, or refinance, federal student loans and private loans together. Because federal student loans are guaranteed, they have a lower interest rate than private loans. This low interest rate carries over into refinancing. Private student loans are essentially personal loans based on future earning potential. An outside party, not the government, is investing in your future earning power. If you were to consolidate private and government loans together, you would have a higher interest rate on your principle, resulting in a higher monthly payment.

Because interest rates are so influenced by your credit history, you should know your credit score before consolidating. Try to get a credit report and repair and problems on the report. Next, you should compare consolidation programs offered by different lenders. Refinancing programs change once a year. Interest rates are very low right now, but they can change drastically from year to year.

Lenders have look for different things before deciding whether they will refinance your student loans. In general, you must be out of school before you can consolidate. Your loans must also be in good standing, that is, you should not be in default or have excessive late payments. You should also remember lenders often have minimum balance requirement. Your total loan debt will have to meet a set total before you can consolidate.

Through loan consolidation, you can reduce monthly payments by getting a lower interest rate or by extending your borrowing period. A lower interest rate will mean that you pay less student loan debt over time. However, if you cannot afford your monthly payments, even at a reduced interest rate, you may want to consider extending your loan term. You will end up paying more money in the long run, but your short-term financial burden will be lightened.