It is important to understand that refinancing is usually divided between Federal Loan Consolidation and Private Refinancing: Refinancing with Private Lenders: A full refinance consist of getting a new loan that would pay your previous debt at a new rate. With this you would be effectively canceling all your initial loans for a new one, that should have a better rate and a better repayment structure. This type of model can be utilized for both federal and private loans. If you have multiple loans and different loan types, this might be your best option to get everything settled under one single formation. Federal Loan Consolidation: If you have multiple federal loans you have the option of combining them into a new loan. With this consolidation, you will be able to get a fixed rate based on the average of all the consolidated loans. And the best part is that this is cost-free! Instead of having to deal with multiple loans and multiple payments every month you can focus on one single payment. This is a great option to simplify your life!