First off, it’s not actually refinancing that you are doing as much as it is consolidating your student loans. Still, you will have a new interest rate and loan terms extended to you which is what refinancing is all about, so it is very similar.
The main difference between traditional refinancing and federal loan consolidation is how they arrive at your interest rate. With traditional refinancing, like in the case of a mortgage, your FICO score, debt to income ratio, and earnings are all important factors.
When it comes to federal loan consolidation it is simply the weighted average of your loans rounded up to the nearest eighth that is fixed for the life of the loan. The repayment term is dependent on your loan volume.
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