Definition

Consolidation Loan: a loan that consolidates, or pays off, several old loans and replaces them with one new loan, usually to obtain a lower interest rate or lower monthly payment by extending the loan over a longer period of time.
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A consolidation loan combines several loans into one bigger loan. This sometimes results in a lower interest rate, as when a consumer loan is used to pay off credit card balances. Such loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10 year repayment plan that is standard with FFELP loans. Of course, extending the term of a loan increases the total amount of interest paid. Consolidation loans also simplify the repayment process by allowing a single payment instead of several, since they replace several loans with a single bigger loan
www.edonline.com/collegecompass/glossary.htm
A type of loan in which all of your eligible federal student loans are combined into one single loan. This usually lowers your minimum payment amount. See the Consolidation Loan Program section of this web site.
https://www.suntechloans.com/info/glossary.aspx

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