What is the difference between consolidating and refinancing allods not updating
In January, RBS Citizens Financial Group, which operates Citizens and Charter One banks, introduced a new Education Refinance Loan, with fixed rates as low as 4.75 percent APR and variable rates starting at 2.8 percent APR.
There are no application, origination or disbursement fees and you don’t have to be a bank customer to apply for this refinance.
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.
Refinancing debt to consolidate multiple loans into a single one is a standard of debt management.
Sometimes it’s to get access to a more favorable interest rate.
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.
Instead, a private lender will typically use a borrower's credit score and other financial information to provide a new interest rate on the consolidated loan.
Sometimes it’s to reduce the monthly payment requirements by stretching them out of a longer repayment period.
And in some cases, it’s just for the administrative ease and simplification of being able to make all the payments to one loan servicer.
Citizens and Charter One will only refinance private loans.
So Fi, a student loan company based in San Francisco, will also refinance government loans.
Edgar Radjabli, of Baltimore, graduated from dental school in 2010, he had eight different loans from six different lenders totaling about $265,000. For many dentists coming out of dental school, loan consolidation and refinancing may be options worthy of consideration as part of a repayment strategy.