Consolidating your federal loans will combine multiple loans into a single payment. It’s available for federal loans, so if you consolidate your federal loans you will still have access to federal benefits, such as a federal forgiveness program. You will not lower your interest rate by consolidating and your loan balance will stay the same. You could lower your monthly payment, but doing that extends your loan term. For example, if you have a loan with a 10 year term and another loan with a 15 year term, you could consolidate them into a single loan with a 20 year term. Your payment per month will be smaller, but when paid out over the 20 years, you are paying more in interest. Auto loan refinancing allows you to consolidate both your private and Federal Direct loans, select a repayment term that makes sense for you, and often get a lower interest rate. In addition to potentially lowering your interest payment, refinancing allows you to remove a cosigner and make auto loan debt more manageable if the new loan terms are better than your current loan. It’s possible to consolidate federal auto loans with a Direct Consolidation Loan from the Department of Education, but this will not allow you to lower your interest rate or select a variable rate loan, and private auto loans are not eligible.

Due to recent events, including an executive order by the President to waive federal auto loan interest during the COVID-19 crisis, we want our clients to explore all their options before applying to refinance their federal auto loans. Refinancing a federal auto loan with a private lender means you will no longer have access to benefits of your federal loans, including the temporary 0% interest rate on federally held loans, suspension of payments, and any future auto loan forgiveness. Please carefully review your current and potential benefits with a federal loan servicer before refinancing.

The sooner you reauto loan, the more you could save. The longer you hold your loan at a higher rate, the more interest you are accruing— depending on your loan type, even if you are in a grace period. That being said, you must be employed with certain income requirements to be eligible to refinance your existing loans with us. The more your financial situation has improved since you took out the loans originally, the better your auto loan refinancing rates will be.

Once you’re approved, you are automatically approved for the total eligible auto loan amount listed on your credit report. When you’re ready to accept your loan, you can choose to refinance less than the requested amount (as long as it’s above $5,000) or up to 105% of your approved amount. Because you’ll be accepting a new loan when you refinance, you will get to choose either a fixed rate loan or a variable rate loan. Here are the differences between variable and fixed interest rates: A fixed interest rate tends to start higher and stays the same for the life of the loan. This means that once you refinance, your new loan interest will not change. A variable interest rate tends to start lower, but may fluctuate over the life of the loan. This means that the total interest you can expect to pay on the loan could change.