$49,905. That is the average student Loan debt amount in the United States. And, if you are one of the recent college graduates, first, congratulations. Secondly, your debt is likely even higher. Many companies will be trying to get you to consolidate your student loans. This can be a smart way to take control of your repayment, but make sure you know what you are getting into. Below, we debunk a few of the most common misconceptions.

“All Loans Have the Same Consolidation Process”

The type of student loan you have – whether it’s federal or private – will determine the process you need to follow. You must go to the Federal Student Aid website to apply for a Direct Consolidation Loan when you have a federal student loan. On the other hand, you need to go through a private student loan company if any of your debt is from private loans.

You should also be aware that debt consolidation is not the same thing as refinancing. Refinancing is only available through private lenders. The refinancing process also offers you a number of ways to change your interest rate and repayment length.

“Consolidating Your Loans Is Expensive”

If you want to consolidate your existing loans, there are several enterprises out there that offer this service. Alternatively, you can take care of the process yourself. In less than half an hour, you can complete the Federal Direct Consolidation Loan application online.

If you chose private lenders, take the time to shop around for consolidation products and compare offers. You can usually submit an online application once you find the best terms for your needs. Be wary of private lenders who attempt to charge you origination, disbursement, or application fees.

“All Borrowers Can Benefit from Debt Consolidation”

Not everyone benefits from consolidating their student loan debt. If you plan to apply for an income-driven repayment plan, a Federal Direct Consolidation Loan can be of great help. However, it can cause you to pay back more in interest by extending your repayment term. Refinancing loans help you get out of debt faster and save money in the long run. On the downside, when you choose a private lender, you lose all federal benefits, including deferment and forbearance programs as well as access to the income-based repayment plans.