Private loans can typically only be consolidated with other private loans.

And once consolidated, they usually have variable interest rates, O’Connor says. Consolidating private student loans when interest rates are low (like now) “could potentially save thousands of dollars.” It also means your interest rate can fluctuate higher as the years tick by.

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Along with gaining a new degree, many graduates will also leave campus with new student loan payments they’ll have to fit into their post-graduate budgets.

Here’s what you need to know before deciding to consolidate student loans.

The difference is you’ll need to apply through a private lender.

Some are better than others, so make sure to look at the varying terms of each one — staying away from charges or origination fees and checking the maximum interest rate so you won’t get burned down the road.

People who are working in the public sector or taking advantage of federal debt relief programs such as income-based repayment or public service forgiveness may not want to refinance, as these programs do not transfer to private refinance loans.

Consolidating student loans via refinancing is best for people whose financial position - in terms of employment, cash flow, and credit - has improved since they graduated from school.Once the application is submitted, the federal government estimates that it takes 60 to 90 days to officially complete the consolidation process.Consolidating private loans works in a similar fashion, as far as paperwork goes.Loan consolidation is when a borrower takes out a new loan to pay off several smaller student loans.Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D. “That new loan will have its own interest rate; it will have its own repayment terms; it will have its own terms and conditions,” she says.Most also have limits on how much you can consolidate.