Every year, in November and December, there is an increase in the number of people who choose to refinance their private student loan debt.
These are popular months for refinancing, as many loans come with a grace period of six months after graduation, when no payments are due. Once the grace period ends and the debtors have to start repaying, people with educational debts start looking for opportunities to reduce monthly bills and interest costs. Refinancing could provide this chance.
If you have a private student loan, consider refinancing, you can use the market with multiple lenders at any time Credible. With a private student loan refinance, you simply need to fill out a form to compare rates and access options from multiple lenders.
If you have private loans, participating in the refinancing season can be a smart move. Here’s what you need to know.
Should I refinance my private student loans?
Private student loans are provided by private creditors, the interest rate and loan terms determined by your income and credit score at the time of application, as well as the prevailing rates when you borrowed.
Refinancing a student loan involves securing a new loan from another private lender and using the proceeds to repay the current loan. However, the new loan will have more advantageous terms, such as a lower interest rate, a more affordable monthly payment, or both.
Student loan refinancing loans have recently reached record lows, so there is a very good chance that most people who have borrowed in the past will get a new loan at a lower rate than they are currently paying. This means that more of your money will go to the principal, and paying off debt should be less expensive and easier.
If you can save money by refinancing private student loans, there are few reasons not to do so, as many lenders do not charge loan initiation fees and you will not have to forgo the benefits of the loan. You can visit Credible to view a rate table that compares rates from multiple lenders without affecting your credit score to see if a refinancing loan can save you money.
LOAN REPAYMENT OPTIONS for private students
Should I refinance my federal student loans?
The grace period for your federal student loans probably ends at about the same time, so you may be wondering if you should refinance this debt as well. In almost all cases, the answer is no.
This is because federal loans cannot be refinanced with the Department of Education, so you should obtain a loan from a private lender to refinance them. This would mean giving up all the benefits to the borrower that only federal loans offer, including public service loan forgiveness (PSLF) options, income-based payment plans, and extended repayment flexibility.
Giving up these benefits would usually be a major mistake, even if refinancing federal loans could reduce the interest rate you pay for them.
WHAT ARE STUDENT LOAN REFINANCE RATES?
How can I get the lowest student loan refinancing rate?
When refinancing your private student loan debt, you want to make sure you get the best interest rate you can to maximize your savings. There are several key ways to do this.
You will want to become as well qualified as possible before applying, which means having a solid proof of income, a good credit score and other minimal debts. Applying for a cosigner to secure your loan can also help you qualify for a low rate, as lenders will also consider the cosigner’s credentials.
Perhaps most importantly, however, you will need to shop around and get quotes from several different creditors to maximize your chances of getting the best rate possible. The APR for private loans can vary from lender to lender, as opposed to federal loans, so it is paid to get multiple quotes. Find your rate today.
An online student loan refinancing calculator can help you see how much different loan options can cost you.
LOAN RATES FOR PRIVATE PRIVATE STUDENTS
How to prepare for the student loan refinancing season
If you want to refinance your private student loan debt to save money, either during the refinancing season or at any time, it is important to make sure that your credit score is as high as possible. Generally, you will need a score between 700 and 700 years to be offered a loan at the most competitive rate, although different lenders have different qualification requirements.
You should check your credit history before applying for a refinancing loan to see your score as well as what is in your credit report. If there are any errors, you will want to correct them by contacting the reporting agency. You can also work to increase your score as much as possible by reducing your debt balance and making all payments on time.
Once you’ve improved your credit as much as possible, it’s time to look for an affordable private refinancing loan for you. Visit Credible today to compare rates from multiple student loan lenders simultaneously so you can find a loan that’s right for your needs. .
SHOULD YOU REFINE MY STUDENT LOANS?