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Your federal student loan consolidation interest rate is the weighted average of your federal loans’ interest rates, rounded up to the next one-eighth of one percentage point. That means larger loans factor more significantly into your final interest rate.
Use the calculator below to find what rate you’ll pay after consolidating student loans. Round up your answer to the nearest eighth.
See your consolidation rate
How federal loan consolidation rates work
Consolidation simplifies your payment. When you consolidate federal loans, you combine multiple loans into one, which leaves you with a single monthly payment. For example, consolidating a $10,000 loan at 5% interest with a $20,000 loan at 7% interest will give you a 6.33% weighted average interest rate. That would be rounded up to 6.375%.
Your interest rate will stay the same. There’s no limit to how high your interest rate could be, but it won’t change throughout your repayment term.
Consolidation won't lower how much you pay overall. You won’t pay less interest by consolidating student loans. Your payments might be lower because your payments are extended.
It helps you qualify for other repayment plans and forgiveness, if you qualify. Consolidation could also help you qualify for certain income-driven repayment plans and forgiveness programs. You don’t have to consolidate all your federal loans — you can choose to consolidate only those that need it. For instance, you must first consolidate parent PLUS loans before switching to the income-contingent repayment plan. You also must consolidate Perkins loans or those from the Family Education Loan Program in order to qualify them for Public Service Loan Forgiveness.
You never have to pay to do it. Consolidation is always free. Consolidate your federal loans on studentloans.gov.
Other ways to cut your student loan interest rate
If you’re interested in saving money on interest, refinancing student loans may be a better bet than federal student loan consolidation.
You can refinance both federal and private loans, not just federal loans. Refinancing is ideal for high-interest private loans in particular, since you’ll lose access to certain protections if you refinance federal loans.
Not everyone will qualify for refinancing. Your interest rate will depend on your credit score, income and other factors.
You can also lower your student loan interest rate by signing up for automatic monthly payments through your lender or getting a loyalty discount if you have a private loan through a bank that offers one.
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