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Fixed interest rates stay the same for the life of the loan.

You’re more likely to have the same monthly payment each month.

The initial interest rate (when you first sign on) may be higher.

Say you have pre-2013 federal loans with variable rates.

Variable interest rates can adjust each month, based on the interest rates available at the time.Here, we’re going to talk mostly about when you might want to pursue federal student loan consolidation, but many of the rules apply to refinancing, too. You take out a new loan, which then pays the balance on all your federal loans, even if they have different servicers (such as Nel Net or Navient) — the companies to which you send your payments.You’re then responsible for paying off the new balance, known as a Direct Consolidation Loan, from a single lender.Consolidation will allow you to switch from a variable rate to the new fixed rate. A variable rate can save you money if you have strong credit – and if interest rates don’t rise significantly.If you plan to repay loans over time, and you’d rather have a steady interest rate than a fluctuating one, a fixed rate may work best for you. For long-term savings, it’s best to lock in a fixed rate when interest rates are low. The Federal Direct Consolidation Loans website offers an online calculator to compare interest rates. If you have private loans, they won’t be covered under the Bipartisan Student Loan Certainty Act, but you can still lower your interest rate through consolidation.

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