Georgillo
New member
- Joined
- Feb 15, 2026
- Messages
- 10
I'll admit it—I used to think refinancing and consolidation were the same thing. Turns out, they're completely different! When I finally understood the distinction, everything clicked and I was able to make much better decisions about my loans.
Consolidation is through the federal government and just combines your federal loans into one payment, but your interest rate becomes the weighted average of your old rates—so you don't actually save money . Refinancing, on the other hand, is through private lenders and can actually lower your interest rate if you qualify . That's the key difference!
Once I understood this, I started shopping around. I looked at lenders like Earnest, SoFi, and RISLA, comparing not just rates but also repayment flexibility. Some lenders offer things like the ability to skip a payment once a year or switch between fixed and variable rates if your situation changes . RISLA even offers income-based repayment options, which is rare for private lenders .
I ended up refinancing about $30,000 of my highest-rate loans with a 7-year term. The new rate was 4.2% compared to my old rates around 7%. According to the refinance calculator I used, I'll save over $8,000 in total interest . The whole process took maybe two weeks from application to funding.
If you're feeling confused, start by understanding the difference between consolidation and refinancing. That one distinction made everything else fall into place for me!
Consolidation is through the federal government and just combines your federal loans into one payment, but your interest rate becomes the weighted average of your old rates—so you don't actually save money . Refinancing, on the other hand, is through private lenders and can actually lower your interest rate if you qualify . That's the key difference!
Once I understood this, I started shopping around. I looked at lenders like Earnest, SoFi, and RISLA, comparing not just rates but also repayment flexibility. Some lenders offer things like the ability to skip a payment once a year or switch between fixed and variable rates if your situation changes . RISLA even offers income-based repayment options, which is rare for private lenders .
I ended up refinancing about $30,000 of my highest-rate loans with a 7-year term. The new rate was 4.2% compared to my old rates around 7%. According to the refinance calculator I used, I'll save over $8,000 in total interest . The whole process took maybe two weeks from application to funding.
If you're feeling confused, start by understanding the difference between consolidation and refinancing. That one distinction made everything else fall into place for me!
I've been putting off dealing with my loans because the terms all blur together. I definitely thought consolidation and refinancing were the same thing—you just saved me from a major mistake.