What is loan consolidation? Loan consolidation is the process of applying for a new loan that will be used to pay off your existing student loan debts.


Consolidation allows borrowers to combine one or more eligible student loans into a single loan with new terms and one monthly payment. Consolidation may allow you to repay your debt over a longer period of time at lower payments, but the total debt will be greater due to the interest that will be added to your principle balance.