Refinancing Student Loans: Everything You Should Know and even more

studen loan refinance

Just imagine – one of six Americans, who owe a student loan/loans, default on their payments or make them less than one in a year!  The statistic might not frighten you until you hear this number – $1.2 trillion. $1.2 trillion in student loans is the price the Americans have to pay for their educational services (according to the report made by the Federal Reserve Bank of New York).

The statistic might not frighten you until you hear this number – $1.2 trillion. $1.2 trillion in student loans is the price the Americans have to pay for their educational services (according to the report made by the Federal Reserve Bank of New York).

Taking into account this statistic, it becomes clear that student loans are a painful subject both for American banks and American students. Of course, this situation has to be solved.

I know that lots of students and their parents are following me. You know, I am fond of reading financial blogs. So, I can advise you the reasonable solution – to refinance student loans.

I’m sure that you’ve heard about this operation for many times but there are moments that must be considered. So, don’t pull the trigger before familiarizing with the pieces of my modest life experience.

So, the main question of this post is the frequent question: “should I refinance my student loans?” If it worries you, keep on reading.

Make Sure You Know the Difference

I’m not the real expert in the financial sphere but I have a friend of mine, who knows everything about these awkward financial affairs.

So, the first moment I want to outline briefly is the difference between loan refinancing and consolidating (lots of people confuse these terms and fall into a trap).

REMEMBER: Loan consolidating doesn’t always mean declining an interest. Loan consolidation doesn’t always mean a profit for the borrower.

Loan refinancing in 90% of cases leads to the declining of the interest. Is it profitable? Hmm. Let’s see.

The Case When Expect No-Brainer Refinancing

refinancing student loan

Obviously, a couple of years ago you could apply for the best offer ever and qualified for the student loan on reasonable conditions. Still, when there is an opportunity to apply for more affordable terms, there might be a party you want to be invited to. Am I wrong? No.

So, you decided to refinance your student loan. I won’t delay the treasured moment – it’s always easier to refinance federal student loans. It has been formed historically that government deals faster and easier with the refinancing of federal students loans than private ones. Honestly, I have no desire to delve deeper.

Still, refinancing your federal loan into private isn’t always a good idea. By refinancing federal loans into private ones, students usually have to say “goodbye” to some benefits. The federal deferment, income-based repayment, or forbearance, forgiveness is the short list of the possible benefits you can lose.

But if you decided to refinance private student loans, I have to upset you. According to the latest changes in laws, you can only refinance the federal loan into a private one. No feedback path. Unfortunately.

The Question of All Time

Of course, a person, who will ask about the bad credit refinancing loan, is now reading this post. My answer remains the same. Obviously, if your credit is as small as your shoe size, student loan refinancing is almost impossible. Though, it can work with private lenders.

So, improve your credit and everything will be great.

Best Places to Refinance Student Loans

I’ve intentionally kept this issue until the end. Refinancing student loans is always a complicated multi-faceted issue. I tried to consider the crucial moments but there are more of them. I hope that you will work with the trustworthy bank consultant, who will tell you the right way.

Otherwise, you can always leave your feedback in comments below and I will answer!

So, here are a couple of places to ask for student loan refinancing:

  1. SoFi – San Francisco, CA

Yes, this service appears in lots of reviews but it can really work. It was the first online institution, which started dealing with student loan refinancing. What you need to know:

  • Variable rates from 2.365%
  • Fixed rates from 3.375%

The only substantial requirement is that a potential borrower must be a graduate of the Title IV school. Still, this organization is more than a lender. There were cases, when people, who lost their jobs and failed in payments, got a help from SoFi and found new promising jobs.

  1. Earnest – San Francisco, CA

This resource offers an opportunity to change fixed and variable rates throughout debt repayment process. I’ve never felt the need to do it but people consider it to be a useful offer. It also offers “skip a payment” and bi-weekly payments for people in difficult financial situations. What you need to know:

  •   Variable rates from 2.55%
  •   Fixed Rates from 3.75%
  1. CommonBond – New York, NY

This company offers student a loan refinancing for graduates and undergraduates students. I’ve read the review that it offers financing education for people in need. I’m not familiarized with the process. But if you are interested, you are welcome to find information.

What you need to know:

  • Variable rates from 2.35%
  • Fixed rates from 3.37%
  1. If you are interested in the credit unions, you can choose among the following:
  • The Alliant Credit Union offers up to $100,000 for 25 years.
  • Credit Union Student Choice – a cool and proven resource but it’s available for the members only. Check out if you are a member, cuz some people live their life and don’t know about this membership.
  •  Navy Federal Credit Union is very profitable for people, who serve. Just check out what the beneficial offers they prepared for you.

So, the best way to refinance student loans is the most reliable one. I truly hope that information that you received will help you! I truly hope that the question “How to refinance student loans?” will never occur in your family. And I truly hope that this day was cool!

If you have any questions, you can always contact me in comments below. And I really appreciate your feedback and propositions.

Always yours, Irene Kot.

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