To most of the fresh graduates out there, it is a painful issue to pay back the loans they have taken to support their college or university studies. If you are currently paying multiple interest rates to multiple loan agencies, you should know how that feels. Have you ever imagine that you can save thousands of dollars by consolidating your student loans? In fact, you can either go for federal or private student loan consolidation.Loan agenciesAs the name implies, federal loan consolidation is offered by the federal government. It doesn’t need credit check or co-signer (guarantor) because this loan consolidation program is protected by the federal government.Private student loan consolidation is offered by banks, loan agencies or credit unions. And depending on the loan agencies, you might need to provide a co-signer or get your credit history check.How they workBoth programs are meant to combine the multiple loans you have into one loan and extend your loan period so that you can enjoy lower monthly payment. For federal student loan program, you can only combine your federal loans. But for private student loan consolidation, it is possible to consolidate your student loans together with your personal loans.Besides that, when you are going for federal student loan consolidation, your interest rate will be lock at the current low interest rate for the whole loan period. For private student loan however, your interest rate might fluctuate with the market rate. You can try to talk to the loan agency to look at the possibility of getting the lowest interest rate.AdvantagesYou can improve your credit score when you consolidate your student loans with both programs. This is because when you have consolidated your loans, you are being seen as servicing one single loan instead of multiple loans.It is said that you will enjoy lower interest rate when you consolidate your student loans with federal government. However, you can negotiate with the private loan agencies to see if there is any alternative for you to get a better interest rate.And for your information, you are allowed to consolidate once with private agency and once with federal agency. So, think properly before you sign up for any student loan consolidation program.