What is the difference between consolidating and refinancing


Federal loan consolidation combines multiple government-sponsored loans into just one loan.

It simply takes the weighted average interest rate of the loans being combined.

As of 2012, there were 5.73 million businesses with fewer than 500 employees.

What’s more, 30% of all jobs in the United States economy are currently held by the self-employed.

"Essentially, if you're consolidating loans with a private lender, you are also in fact refinancing those loans," according to So Fi, a peer-to-peer lender based in San Francisco.

In other words, refinancing is when a borrower applies for a loan under new terms, and uses that loan to pay off one or more existing student loans.

Some of which even include terms that allow unrepaid student loans to be forgiven after 25, 20, or even 10 years in some circumstances.

It’s always been possible to refinance private student loans, but few financial institutions offered this service.Consolidation is when you bundle all of your existing strands of debt into one single loan.That might or might not involve a lower interest rate, but it is not, strictly speaking, refinancing.Just as no one plans to get over their head in personal debt, no one plans to get over their head with business debt, either.So if you need to know how to refinance or consolidate your business debt, here’s our quick and dirty guide on how to make it happen. What is the difference between consolidation and refinancing? Edgar Radjabli, of Baltimore, graduated from dental school in 2010, he had eight different loans from six different lenders totaling about 5,000. For many dentists coming out of dental school, loan consolidation and refinancing may be options worthy of consideration as part of a repayment strategy.

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