To determine your consolidation rate for your federal loans, a lender will calculate a weighted average of your current loan rates and then round up to the nearest 1/8, but not to exceed 8.25%.
Calculate your potential consolidation rates using FinAid's consolidation calculator.
Your interest rate also depends on the type of federal loans you have and when you took them out.
You can lock in a lower consolidation rate by consolidating during your grace period (the several months immediately after graduation, during which most lenders will not force you into repayment). Consolidating during your grace period, while ultimately helpful because your interest rate is lower, does force you into immediate repayment, even if you still had a few months left before scheduled payments were to begin.
Because Stafford loan holders who graduated in 2007 or after will pay fixed rate interest, it's not as clear that they should consolidate as it has been in the past.
Note you cannot consolidate loans if you are currently in school.
It is not recommended that borrowers consolidate federal loans into a private loan because you will lose important privileges to defer, apply for a forbearance, or qualify for loan forgiveness under government programs.
And under no circumstances should you pay a fee to consolidate your federal loans.
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