If you are one of the millions of Americans struggling to repay their student loans, then you may want to consider consolidating your loans. Student loan consolidation can reduce your multiple payments in one single payment, and in most cases, it will reduce your monthly payment amount. While this can be beneficial in the short-term, you will end up paying more over time because of the interest in addition to the extended repayment term.

Federal Student Loans

SoFi is one of the few lenders that offers consolidation options for federal and private student loans. They also offer refinancing options for federal and private loans as well. Although the specific details vary by state, in most cases, there are no penalties for paying the loan off early and no additional consolidation or loan fees. SoFi offers loans with variable and fixed interest rates.

Loan Consolidation

The variable interest rate for student loan consolidation is between 2.815% and 6.740%, and the fixed rate loans have an annual percentage rate (APR) ranging from 3.350% to 7.125%. These are extremely low rates compared to other lenders who offer similar loans. Additional discounts are available if you become a SoFi member, and the loan comes with unemployment protection, which allows you to defer your payments for a certain amount of time.

Loan Refinancing

SoFi also offers federal and private student loan refinancing options. Refinancing your student loan debt allows you to create new loan with lower interest rates to replace your previous loan or loans. The difference between refinancing and consolidating is that refinancing allows for a completely new interest rate, while a consolidation rate depends on the interest rates you are currently being charged on your student loans.

Refinancing is typically only a good option if you have a good credit score, because this will allow you to get a competitive interest rate. If you have bad or poor credit, chances are you won’ t get an interest rate that is lower than your current student loan rates.

Finding the Best Option for You

SoFi offers some of the best student loan debt consolidation and refinancing options, but the process can be a bit overwhelming. Coaches and advisors are available through SoFi, and they can help you determine the best option for your specific financial situation. If you can consolidate both your federal and private student loans in one place, then you are already on the path to success.