Can you consolidate student loans more than once?

Student loan consolidation simplifies repayment by combining multiple federal student loans into a new single loan. Consolidating federal student loans is beneficial if you want a lower monthly payment, access alternate repayment plans, and keep borrower protections that only federal student loans offer.

If you have private student loans, the consolidation process is often referred to as refinancing, and it can help you secure a lower interest rate, saving you money on your current loans. Note that refinancing federal student aid is generally not advised, as you'd lose valuable benefits like loan forgiveness and income-driven repayment plan options.

You can consolidate student loans more than once in certain situations, and it may be worthwhile depending on your goals.

How many times can I consolidate federal student loans?

You can consolidate federal student loans more than once if you have:

• Eligible federal loans that weren't previously consolidated - for example, if you already consolidated your undergraduate loans and borrowed additional loans for graduate school, you can consolidate the new loan into your existing new Direct Consolidation Loan.
• Previously consolidated loans under the Federal Family Education Loan (FFEL) program

You can reconsolidate an existing FFEL loan if:

• Your loan is in default or delinquent and you agree to repay your new consolidation loan under an income-driven repayment (IDR) plan
• You want to enroll in Public Service Loan Forgiveness (PSLF)
• You're an active-duty military service member who wants to pause payments on interest accrued on your loan for up to 60 months

Can I refinance student loans more than once?

You can refinance private student loans multiple times, as long as you meet the lender's credit and income-contingent repayment requirements. The upside of refinancing more than once is that you can lower your monthly bill payments and potentially reduce your interest rate even further.

While it's possible to refinance previously consolidated federal loans with private student loans, it's not always the best idea. Refinancing federal student loans means you'll no longer be eligible for any government benefits, like income-driven repayment, forgiveness, and deferment or forbearance options.

To refinance student loans, you'll generally need to meet the following criteria to qualify:

• A good-to-excellent credit score: For most lenders, this means a score in the mid-600s or above.
• Stable income: Some lenders have a minimum income requirement. For example, ELFI's refinance loans require borrowers to have a minimum income of $35,000 to qualify.
• A debt-to-income ratio below 50%: A low debt-to-income ratio (DTI) shows lenders that you'll be able to manage your loan repayment effectively. Typically, a DTI of 36% or below is considered ideal.

If you don't qualify on your own, consider applying with a cosigner to improve your chances of getting approved. A cosigner is often a family member who meets lender requirements and agrees to make the loan payments if for some reason you can't.

Related: Can you refinance student loans with bad credit?

Benefits of consolidation

• Simplify debt repayment: With consolidation, you have one monthly student loan payment instead of juggling multiple loans.
• Potentially save money on interest: Consolidating private student loans into a new refinanced loan might get you a lower interest rate, saving you money on total interest charges. Refinancing a second time can potentially reduce your interest rate even further.
• Lower your monthly payments: Depending on your total federal student loan debt, consolidation lets you extend the time to pay back your loan up to 30 years. You'll lower your monthly payment, but increase the repayment period and pay more interest overall.
• Access new benefits and repayment plans: When you get a federal consolidation loan, you can choose an income-driven repayment plan or qualify for forgiveness programs, like Public Service Loan Forgiveness.

Drawbacks of consolidation

• You might not save money: If you don't have great credit or access to a cosigner with strong credit, private student loan consolidation might not make sense, since you likely won't qualify for a lower interest rate.
• You might pay interest for longer: Consolidating federal loans can help you lower your monthly payment by extending your repayment period - but a longer repayment timeline typically means you'll owe more in interest charges over time.
• Your principal balance might increase: When you consolidate federal loans, any unpaid interest gets tacked onto your principal loan balance in a process called capitalization, increasing the total amount you owe.

Alternatives to consider

If you don't qualify for consolidation but want to take advantage of a longer repayment period and lower payments, consider one of the following alternatives:

• Income-driven repayment: These plans base your monthly payment on your income and family size. Income-driven repayment (IDR) plans offer flexibility and potentially reduce your payments, especially if you're unemployed or experiencing financial hardship. Most federal student loans are eligible for an IDR plan; defaulted loans are not.
• Forbearance: You can pause or reduce your federal student loan payments for up to 12 months. Forbearance must be approved by your loan servicer, and you'll still be responsible for paying the interest that accrues on the loan.

Deferment: Deferring your loans allows you to suspend payments temporarily. Interest won't accrue during the deferment period if you have a subsidized federal student loan or Perkins Loan. This option is available if you're back in school, unemployed, or struggling to make your minimum payments.

Bottom line

If you meet the requirements, consolidating your student loans more than once may be a smart way to help make your monthly payments more manageable. If not, consider other repayment options, such as refinancing, income-driven repayment, forbearance, or deferment. 

Frequently asked questions

When can you start consolidating student loans?

Federal student loans are typically eligible for consolidation after you graduate, leave school, or drop below half-time enrollment. Loans must be in repayment or in a grace period.

Can I consolidate an existing consolidation loan?

You can consolidate an existing consolidation loan in specific situations. For example, if you want to include an eligible federal loan that wasn’t part of a previous consolidation, you can go through the process again.

When does repayment start for consolidated loans?

On average, student loan consolidation can take a few weeks to a few months. Your loan servicer will let you know when your first payment is due on the new consolidation loan — generally 60 days after the funds are disbursed.