Student Loan Consolidation and Debt Payoff Calculator

The Student Loan Consolidation and Debt Payoff calculator applies two simple principles to paying off high-interest debt.
  1. Consolidate your existing student loans
  2. Use your extra cash every month to pay off your higher interest debt sooner
We apply the amount of payment savings you choose to your non-student loan debt with the highest rate. When that balance is paid in full, the balance with the next highest rate will be paid down. This continues until you have rolled through all of your balances and your non-student loan debt is paid in full. Click the "View Report" button for a detailed look at the results.

Everything You Need to Know About Student Loan Consolidation

If you're a person who has student loan debt and you're struggling to remember multiple payment due dates, there is an easy solution for that. Federal Student Loan consolidation can help to lower a borrower's monthly payment while combining several loan payments into one, easy bundle. Student loan consolidation may seem intimidating if you're trying to understand each aspect of it, but this guide will break it down into sections, and it will give you a thorough understanding of the entire process by the end.

Student Loan Consolidation, What is It?

The term 'student loan consolidation' just means the process of combining several student loan debts into one easy payment each month. You will also have the option to lengthen the repayment time on your loan, and this, in turn, will lower your monthly payment amount. There is also the option to increase your repayment time but keep the original interest rate. This option will also reduce your monthly payment, but you will end up paying more money in interest fees over the life of your repayment terms.

Is There a Difference Between Federal and Private Loan Consolidation?

Once you start the process of consolidating your loans, you'll quickly realize that there are two categories of loans in the consolidation process.

  • Federal Student Loan Consolidation. If you want to consolidate your Federal student loans, you'll have to apply and go through the Department of Education - Loan Consolidation Program. If you choose to do this, your interest rate will stay the same. This fixed interest rate means that if you decide to extend your loan repayment time, you'll end up paying more in interest by the time you finish repaying your loan.
  • Private Student Loan Consolidation. If you've ever heard of the term 'loan refinancing,' it means that a lender will pay off all of your existing student loans and give you a new loan to cover the debt that they paid. This new loan will usually have a lower interest rate. Some popular private student loan refinancing companies include: Citizens Bank, College Ave, Earnest, iHelp, MEFA, RISLA & CommonBond.

How Does Refinancing Your Loans Help You?

The biggest thing that comes to refinancing your private student loans is a lower interest rate. If you can make your monthly payments, but you think your interest rate is too high and you're not paying off enough of your principal loan, refinancing would be a good option to look into.

If you consolidate your Federal Student Loans, you won't get the opportunity to lower your interest rate. However, you can choose to increase your repayment time, and this will lower your monthly payments. A consolidation is an excellent option for anyone who has been struggling to pay their monthly amount on time. If you don't think that you'll be able to keep making your monthly payments, this may be a viable option for you as well.

Your Loans Before Consolidation

Loans Balance Rate
Loan A $15,000 7.9%
Loan B $21,550 6.8%
Loan C $43,942 4.29%
Total Balance $80,492 Weighted Average: 5.38%

Your Loans After Consolidation

Loan Balance Rate
Loan A $80,492 5.38%

Once You Consolidate Your Loan, Can You Refinance It?

Once you consolidation your loan, you can't consolidate it again unless you're planning to add more debt to your original balance. However, if you're looking for a way around this, you can refinance your consolidated loan. You can do this because you refinance your loan through a private lender and it originally came from the Federal Government. If you do this, you'll lose any borrower benefits you may have had with the Federal Government. These can include access to income-driven repayment plans, deferments, or forbearance.

Student Loan Consolidation Pros

If you're thinking about consolidating your loans for the simple fact that it will be easier to remember one payment each month, several other pros and cons come with this process that you might not realize are available.

  • Avoiding Defaulting. Loan consolidation will help you stay organized, payment wise. This process will give you fewer payments to worry about, and you will have a lower chance of missing any each month.
  • Consolidating Defaulted Loans. If you have tried loan rehabilitation and it didn't work out, you can try to consolidate your defaulted loans. Your new loan will be a Federal Direct Consolidation Loan, and you will have to agree to repay this loan with an income-driven repayment plan.
  • Lower Monthly Payments. When you consolidate your loans, you'll get the option to extend your loan repayment period. If you take it, you'll pay lower monthly payments until the loan is paid off. If you're a borrower that is currently struggling to pay your monthly fee, this could help you avoid default.
  • Several Repayment Plan Choices. If you consolidate your loans, you will get the chance to customize sections of your loan. You may get the opportunity to change your loan repayment period, and there are a number of repayment plans available. They have the standard ten-year repayment plan in addition to a graduated plan and an income-based repayment plan as well.

Student Loan Consolidation Cons

Student loan consolidation seems like a good idea at the moment, but there are several long-term things you should consider before you consolidate your loans.

  • Higher Repayment Costs. If you lengthen the term of your loan, you'll end up paying more over the life of your loan. It may be helpful to lower your monthly payments, but if your interest rate stays the same, you'll pay thousands in interest fees alone by the time you pay your loan off.
  • Lose Eligibility for Some Repayment Plans. If your parents took out a PLUS loan to help pay for your tuition, it's not eligible for the income-driven repayment plan or the pay as you earn plan. This means that if you decide to consolidate your PLUS loans with any other Federal loans, you'll lose access to these repayment plans.
  • Single Chance. Generally, you can only consolidate your loans with the Federal Government one time. However, there is no limit on the number of times you can refinance your loans with a private lender. This is one way to take advantage of potentially lower interest rates.

Which Loans are Eligible for Consolidation?

If you borrowed loans from the Federal Government, almost all of them qualify for the consolidation process. These loans include:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Direct PLUS Loans
  • PLUS Loans from the Federal Family Education Loan Program (FFEL)
  • Supplemental Loans for Students
  • Federal Perkins Loans
  • Federal Nursing Loans
  • Home Education Assistance Loans

What Should You Keep in Mind Before You Consolidate Your Loans?

If you're not sure about consolidating your loans, you should think carefully about this process because once you do it, you can't go back to how it was before. You should remember these key points:

  • One student loan has to either be in active repayment or currently in a grace period
  • If you have loans in default, you will have criteria that you have to meet
  • Once your Direct Consolidation Loan has been disbursed, you have 60 days to begin repayment
  • Until you get confirmation of a successful consolidation, you will have to keep sending monthly payments to your original lender

If You Have Loans From Different Lenders, Can You Consolidate Them?

If you have federal loans that are eligible for consolidation, you can consolidate them in a Direct Federal Consolidation Loan, and it doesn't matter who the loan servicer is. If you have both private and Federal loans, you can refinance them together with a private lender. If you do this, you may want to check and see if they have alternative repayment options because you'll lose access to and Federal ones.

Refinancing Federal Direct Loan Consolidation
Are Federal Loans Eligible? Yes Yes
Are Private Loans Eligible? Yes No
Will it Lower the Monthly Payments? Yes Yes
Will it Lower the Interest Rate? Yes No
Can I Keep Borrower Benefits? No Yes
Can I Shop Around? Yes No

Is It Possible to Consolidate Credit Card Debt?

If you have gotten yourself into debt with credit cards, it is feasible to consolidate these as well to streamline your payments. Many people choose this option after they've run up large balances and they can't afford to pay multiple monthly payments.

  • Balance Transfer. A few lenders will allow you to take all of your credit card balances and transfer them to a new card with a zero percent introductory interest rate. If you think you can pay your balance off before the new introductory rate ends, a balance transfer can be beneficial.
  • Leverage Home Equity. Leveraging your home equity is an available option to consolidate your credit card debt if you currently own your home. You put your house up for collateral and open a line of credit using it. You take the money that you get from this and pay off your existing debt. However, you are risking your house, so make your payments on time every month.
  • Take Out a Personal Loan. If you think you'll have trouble paying off your existing credit card balance before the promotional period end, consider taking out a personal loan. You will still have the interest to pay with your loan, but it is usually a lower rate than you'll pay with your credit card after the promotional period ends.

If You Have Bad Credit, Can You Still Consolidate Your Loans?

If you know you have bad credit and you still want to consolidate your loans, this is still an option. However, you should be aware that it will take more effort and work on your part. It might also limit your choices, but you should still have options available.

  • Get Your Credit Score. If you don't know your credit score, the first thing you should do is pull your free credit report. You can obtain this credit report for free once a year by clicking here.
  • Compare Debt Consolidation Companies. You should compare debt consolidation companies, so you know what they offer. They may offer low monthly rates, but you should still research each one thoroughly. You don't want any surprises, so read any fine print and ask questions. You should know the interest rates and the fees that you'll get charged if you use them.
  • Peer-to-Peer Lending. A peer-to-peer lending company acts as a broker and helps to connect private lenders to borrowers who are looking for a loan. These companies may be less strict on past credit and lower credit scores, and you're more likely to get approved.

If you have student loan debt, it is considered to be 'good debt.' Lenders look at it like this because it is an investment in your education and your future. Your credit score may improve if you make consistent, on-time payments each month.

What Is The Student Loan Consolidation Process?

If you've read through this post so far and you have a good understanding of what the differences between consolidation and refinancing are, and if you understand the pros and cons that come with this process, you may have decided this is for you. Now you just have to learn how to start the process of student loan consolidation.

Applying for Federal Direct Loan Consolidation

You should have all of your current loan documents in one place before you begin this application process because you have to start and finish the entire thing in one sitting. The process will be much easier if you have all of the documents you need with you. There are three steps to the Federal Direct Loan Consolidation application process, and they are listed below.

  1. If you have all of your documents, go to and log into your account. Next, locate the consolidation application and complete it. If you're having trouble, click here to be redirected. It'll prompt you to log in if you haven't already, and then it'll take you straight to the application. Once the application is complete, select the loans that you want to consolidate.
  2. Enter all of the relevant information about each of the loans you want to consolidate. When this is done, you'll have to choose a new student loan lender. This will be the company that will help you stay in good standing. They do this by monitoring your payments and making sure you make them on time each month, answering any questions, and helping you change repayment plans if you need to.
  3. The final step is to choose a new repayment plan. You should look at each one and read everything, so you make sure you are choosing the best one for your situation. There are eight repayment plans you can pick from, and you can use the repayment calculator to find out which ones you qualify for. This will help you narrow down your options quickly, and you can pick the one that suits your situation the best. To finish this process, hit submit and wait for them to be consolidated.

Consolidation Eligibility Requirements

Before you begin the application process for Federal Direct loan consolidation, there are several points you have to consider. Aside from these eligibility criteria, you must also continue to pay your original loan servicer until you are notified you are approved for consolidation.

  • No matter how many loans you want to consolidate, at least one of the loans must be either a Direct Loan or an FFEL loan.
  • Your loans must be in repayment or currently in a grace period.
  • If you have already consolidated your loans, you can only consolidate them again if you add more loans on.

How Can You Find the Best Loan Consolidation Lender?

The private loan consolidation or refinancing is a little more work than the Federal Direct Consolidation. There are dozens of lenders to choose from, and they are all competing for your business. Each consolidation lender has their own requirements and their own interest rates; this is why it is so important to do your research before you settle on one. You want to get the best price and the best terms possible when you refinance your loans.

What are the Different Loan Servicers You Can Choose From?

When you consolidate your loans, there are four possible loan servicers you can pick, and they will be responsible for helping you until your loan is paid off.

  • FedLoan Servicing. FedLoan Servicing is part of the Pennsylvania Higher Education Assistance Agency (PHEAA), and it acts as the Direct Loan Servicing Branch.
  • Great Lakes Higher Education. Great Lakes Higher Education is a non-profit agency. This servicer works as a guaranty agency for the FFEL Federal Loan Program.
  • Nelnet. Nelnet is a for-profit company that works with student loans in the United States and Canada.
  • Navient. Navient is the largest private student loan servicer in the country, and it is a for-profit company. This company is responsible for acquiring, financing, and servicing Federal Student loans in the FFEL program, along with private student loans.

When do I Start Repaying my Loans?

Once your consolidated loan is disbursed, you have 60 days to begin making payments. You may have to pay sooner, and your loan servicer will contact you and let you know when your first payment is officially due. Depending on the terms you picked, your payment plan can range from 10 to 30 years. If your loans are in a grace period when you consolidate them, you might be able to arrange to finish the grace period before you pay on your consolidated loan. You should make a note of this in your original application, so your new loan servicer is aware of it.

Which Payment Plan is Right For Me?

Currently, there are eight separate repayment plans available for student loan borrowers. There are two main categories that all eight of these repayment plans fall into. These plans are either income-driven repayment plans, or they're not.

Income-Driven Repayment Plans

These repayment plans determine your monthly payment by calculating your average monthly income and taking a percentage of that. This percentage amount will be your new monthly loan payment. They generally have longer repayment terms as well, and it isn't odd to see them stretching from 10 to 25 years.

Loan Forgiveness.

These plans offer loan forgiveness after you have made your monthly payments on time throughout your repayment period. Once this period is over, they'll wipe out your remaining balance. However, you should note that any balance that is forgiven is considered income and you will have to pay taxes on it for the year they wipe it out. You will also have to re-certify these types of repayment plans once a year to stay active.

Repayment Period Minimum Monthly Payment Eligible Loans
Income-Based Repayment 20 to 25 Years 10% or 15%
  • Subsidized & Unsubsidezed Loans
  • Subsidized & Unsubsidezed Federal Loans
  • Direct PLUS Loans
  • Direct or FFEL Consolidated Loans Made to Parents
Income-Contingent Repayment Up to 25 Years 20%
  • Direct Subsidized & Unsubsidezed Loans
  • PLUS Parent Loans
  • Consolidation Loans
Income Sensitive Repayment Up to 15 Years Based on Annual Income
  • Subsidized & Unsubsidized Federal Stafford Loans
  • FFEL PLUS Loans
  • FFEL Consolidation Loans
Pay As You Earn Up to 20 Years 10%
  • Subsidized & Unsubsidezed Loans
  • Direct PLUS Loans
  • Direct or FFEL Consolidated Loans Made to Parents
Revised Pay as You Earn 10 to 25 Years 10%
  • Subsidized & Unsubsidezed Loans
  • Direct PLUS Loans
  • Direct or FFEL Consolidated Loans Made to Parents

Non-Income Driven Plans

The second category for the repayment plans is non-income driven plans. These plans calculate your monthly payment amount without taking your income into consideration. The plans in this sector include the standard repayment plan, the graduated plan, and the extended repayment plan.

Repayment Period Eligible Loans
Graduated Repayment Plan Up to 10 Years
  • Subsidized & Unsubsidized Loans
  • Subsidized & Unsubsidized Federal Stafford Loans
  • All PLUS Loans
  • All Consolidation Loans
Extended Repayment Plan Up to 25 Years
  • Direct Subsidized & Unsubsidezed Loans
  • Subsidized & Unsubsidized Federal Stafford Loans
  • All PLUS Loans
  • All Consolidation Loans
Standard Repayment Plan Up to 10 Years
  • Direct Subsidized & Unsubsidized Loans
  • Subsidized & Unsubsidized Federal Stafford Loans
  • All PLUS Loans
  • All Consolidation Loans

What are the Specifics for Each Repayment Plan?

Now that you know how to apply for each repayment plan, what loans you can consolidate with each play, we'll go into detail about each of them, so you get a clear understanding.

  • Extended Repayment Plan. If you're not making this much money, or if you're having trouble affording your loan payment, this might be a good option for you. You lengthen the repayment period on your loans, and doing this will lower your monthly payment amount. You can choose fixed or graduated payments, and you must have more than $30,000 in FFEL or Direct loans to be eligible.
  • Graduated Repayment Plan. This payment plan must is a good choice for anyone who plans to make more money later in their careers. Your payment starts on the low end of the spectrum, and they increase every two years until the loans are paid off. You will pay more in interest with this plan than you would on the standard repayment plan.
  • Income-Based Repayment Plan. An income-based repayment plan is a good option for anyone who has FFEL and Direct Loans and if they are worried about affording their monthly payments. You have to re-certify this plan each year, and your payment amount is 10 to 15 percent of your monthly income. Any left over amount after 20 or 25 years of payments will be forgiven.
  • Income-Contingency Repayment Plan. If you have Direct Loans only and you want to lower your monthly payment amount, this plan is an option. It bases your monthly payment on 20 percent of your monthly income. If you make on time payments for 25 years, any remaining balances will be forgiven.
  • Income-Sensitive Repayment Plan. This repayment plan is for Subsidized and Unsubsidized Loans, FFEL PLUS Loans, and FFEL Consolidation Loans. You have to re-certify this plan annually, and the payment amount is solely based on your income. You pay this plan back over a 15 year period.
  • Pay As You Earn Repayment Plan. You can use this plan with Direct loans, and you pay it back over a span of 20 years. Your monthly payment is 10 percent of your income, and you have to re-certify this plan each year to stay eligible. After 20 years of payments, any balances will be forgiven.
  • Revised Pay As You Earn Repayment Plan. This plan is for Direct loans only, and your repayment terms are 20 to 25 years. You will make a payment that is up to 10 percent of your monthly income, and you have to re-certify this annually. Once you've made payments for 20 to 25 years, the remaining balance will be wiped out and forgiven.
  • Standard Repayment Plan. This is one of the most traditional payment plans that are currently available. Your payments will stay the same over your repayment period, and this is generally a ten-year term.

With this guide, you should now have a good understanding about each section of loan consolidation. This process can save borrowers from trying to remember multiple payments each month, and it may even be able to help them lower their monthly payments.


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