Many recent college graduates saddled with student loan debt and facing a weak job market can look to refinance student loans for some financial reprieve. The main goal of refinancing is usually to reduce or consolidate multiple payments that many students have.
When refinancing your student loans, there are some things you should think about if you have both federal student loans and private loans; you want to consider refinancing them separately. This is because of the way federal loans are structured; you may be able to obtain a much lower interest rate on them than you can on private loans.
Private student loans are basically personal loans made with the assumption that your income will increase with more education. Consolidating the two may cause you to have higher payments. You can also consider 12 month payday loans.
A student loan refinance lowers monthly loan payments by either locking in a lower fixed interest rate or extending the term of the loan. The latter lowers the monthly payment but costs more overall.
Many lenders will not refinance an existing student loan because it isn’t profitable for them. However, if you’re interested in trying to land a student loan refinance, consider these seven tips:
Think twice about refinancing if you have a federal Perkins loan. There are low interest loans to assist financially challenged students pay for secondary education. A refinance of this loan would eliminate some of its benefits. The tricky part is learning how to refinance your loan.
Inquire with your current lender about a consolidation. This is far from a guaranteed deal, but it may be a way for your lender to retain your business. Check with your community bank. At the very least, they will have a referral service.
The best advice for any student looking to get a student loan is to apply to all available sources. Apply to both private and federal student loans as you will most likely be eligible for one.