The amount of student debt in the United States is skyrocketing; according to the Wall Street Journal. The average 2015 college graduate will have to pay back $35,000 in loans -- which, let me tell you, sounds laughable after graduate school.

But student loan debt is no laughing matter, and it can cause deep financial hardship.

Student loan consolidation is an option for many graduates, and the proliferation of online banks is further helping the debt-burdened population.

If you're interested in consolidating your student loans, we're here to help. We'll show you where to look online and what to watch out for; and you won't even need to leave your house.

What Is Student Loan Consolidation?

First of all, let's make clear exactly what loan consolidation is. Consolidating your loans requires that you take out another loan equal to your outstanding debt on all or some of your loans. This loan is used to pay off your original loans, leaving you with a single loan instead of several.

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You still end up with student debt -- so why would you consolidate? The primary motivation is that you can get a better interest rate. You'll have a single interest rate on all of your loans, instead of different rates for different loans, and it could be significantly lower than the average on your current loans. It can also be easier to manage repayment of a single loan than multiple loans.

However, it's important to note that if you consolidate your loans and get a lower monthly payment than you would have gotten through the federal loan program, you may end up paying more in interest over the life of the loan. So you'll need to weigh your options carefully.

Before you read on, do yourself a favor and read this phenomenal article about the fastest way out of debt. It'll change your financial life (and give you the background information you need to really understand the rest of this article).

How Much Can I Save with Loan Consolidation?

The amount that you can save depends heavily on how much outstanding debt you have, the interest rate on those loans, which provider you use to consolidate, your credit rating, and other factors.

Each bank uses different criteria to determine the details of your consolidation loan.

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SoFi [Broken URL Removed], a refinancing group, states its average savings at $14,000 per borrower. Earnest claims an average of $12,588. DR Bank says that you could save $15,000 over the life of a $100,000 loan. So while it's hard to know exactly how much you could save, there's certainly potential for a significant sum.

Think Interest Rates

As with the amount you can save, the interest rate on your consolidation loan can vary widely.

If you refinance through the US government's Direct Loan Consolidation program, your interest rate will be the weighted average of the interest rate on your current loans. This won't save you any money, but it will make the repayment process simpler.

The advantages to federal consolidation are that you don't need a fantastic credit score to get it, and that your interest rate is capped at 8.25%.

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Other lenders, however, offer consolidation loans with interest rates as low as 1.90%. Of course, not everyone will get this interest rate; it has to do with your repayment term, credit history, loan balance, if you sign up for auto-pay, and whether you choose a fixed rate or variable rate loan. Variable rate loans generally have lower interest rates, though they may change over the life of a loan.

To get an estimate of what you might pay, you can use the 2-Minute Get Your Rate estimator at Earnest. Just enter your information, consent to a soft credit check, and you'll see some possible options; these aren't final, as you'll still need official approval, but they can serve as a good estimate of what you could pay.

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Earnest also lets you design your own loan by choosing a monthly payment and giving you the resulting loan terms and total payments.

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Most sites have tools like this that will help you get an idea of what sort of consolidation loan you'll be eligible for.

How Do I Get Started?

To get the best deal on loan consolidation, you should go through a number of steps before choosing a provider and applying for a loan. Here's how to go about it.

1. Determine which loans are eligible for consolidation

In general, your loans need to be in a grace period or in repayment (including deferment) for them to be eligible. Some providers will let you refinance during the last semester of your higher education, so check with the specific providers that you're looking into.

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Also, it's important to note that you cannot consolidate two people's loans together. While it used to be possible to consolidate your loans with your spouse's, this is no longer an option with federal loans, and -- as far as I'm aware -- there aren't any private lenders that let you do this, either.

2. Research non-consolidated loan repayment plans

To understand whether you're getting a good deal, it's a good idea to use a loan payment calculator (like the one at StudentLoans.gov) to see what your monthly payments, loan terms, and total amount paid without consolidation would be.

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You may also find that you're eligible for better rates because of your borrowing history or if you're working in a public institution, and that could make a big difference. Income-based repayment (IBR) plans can also save you a lot over the life of a loan; if you're eligible for an IBR program, take time to seriously consider that as an option.

3. Check your credit report

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The banks that offer consolidation loans will be checking your credit report, so it's important that you know what's on there. Use AnnualCreditReport.com to get a copy of your report from all three major reporting bureaus and make sure that there aren't any errors that could affect your offered interest rate. (You can also get your credit score if you like.)

4. Take a look at interest rates

It may seem like a good idea to take a variable rate loan, as they have the potential to maintain a much lower interest rate. And if you're going to pay off your loan quickly, you may want to take this risk.

However, if you're looking at a 20- or 25-year loan payment plan, choosing a fixed rate might be a good idea if interest rates are low (as they are now).

5. Get offers from as many providers as possible

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As long as a refinancer doesn't charge for giving estimates and they do a soft (instead of a hard) credit check, you might as well get as many offers as possible.

Check out the student loan refinance page at Magnify Money to see a list of providers.

Find the best interest rate, and make sure that there are no prepayment penalties—that way you can pay off your loan early without incurring any extra fees.

6. Apply for your first choice

When you find the provider that will give you the best deal for your situation, go ahead and apply. If you're accepted, great! Follow the instructions and get your consolidation plan started.

If not, go to your second choice. Keep working down the list until you find a provider that will help you save money on your student loans.

Do Your Research

When looking into the options for consolidation, it's important to do as much as research as you can beforehand.

Many providers have different standards for assigning interest rates, and knowing which ones will be beneficial to you could help you save even more money.

Make sure you understand what you're signing up for before you apply, and read up on the current interest rates and available federal repayment plans. Take time to learn more about finances.

Student loan debt can be a huge burden, but you don't need to be crushed under its weight. Don't be intimidated by the fancy financial terms that banks throw around. Do your research, make some estimates, and get on a payment plan that works for you!

Do you have more questions about student loan consolidation? Ask them in the comments below! Or have you refinanced student loans? Would you recommend it to other graduates? Share your thoughts!

Image Credits: Singkham via Shutterstock.com, Nattapol Sritongcom via Shutterstock.com [Broken URL Removed], wongwean via Shutterstock.com