Students may find it difficult to pay back their education loans due to a number of reasons. The reasons may include unemployment, low wages or high financial responsibility to one’s family. In this case, they can choose to refinance loan payments after carefully reviewing their financial situation. Refinancing a loan means that a student takes out a new loan with which he/she pays off his/her education loan. The student then enters into a new agreement with the new lender and pays off this loan on fresh terms and conditions.
The most important thing to do before you apply for refinancing your loan is to have all the information about your loan. Get in touch with your loan servicer, find out the total amount you owe and ask if you are eligible for any rebate. Also find out if your profession or any other factor may qualify you for loan forgiveness. If the only option left is to refinance loan, then you need to understand what to expect.
First of all before applying for refinancing, you need to improve your credit score. Usually this not only improves your chances of getting your loans refinanced, it also might help you get a lower interest rate.
Private Loan Consolidation with Citizens and Charter One
Citizens Bank Federal and Private Student Loan Refinancing
- Citizens Bank customers have saved an average of $127/month
- No application, origination, or disbursement fees
- Fixed and variable rate options available
- Potential to save up to 0.50 percentage points off your interest rate with available discounts
- How much interest you will have to pay in your refinance loan?
- How much is the total amount you will end up paying?
- How does refinancing affect any tax benefits that you currently get?
- Which lender has the most credible repute and satisfied clients?
Another important thing to know is that loan refinancing conditions differ for federal and private loans. If you have taken a federal loan, contact the Federal Student Aid Information Center to find out if you are eligible for a refinance. If you have a private loan, find out the terms of refinancing that your lender may have.
Know what to expect from refinancing your loan? In order to do that, use our Private Loan Consolidation Tool to find out the best options you have to refinance your loans.
Facts About Debt
The average college graduate begins his or her post-college days with over $2,000 in credit card debt. The median credit card debt is even higher: about $3,000. The average starting salary for a college graduate, on the other hand, is about $43,800 per year. Students must understand what is reasonable debt and what is more difficult to manage. Using a college debt calculator can help. These calculators can help students, as well as their parents, have a clear idea of what student loans are going to cost them in the long run.
How to Manage College Debt?
If you take out federal loans instead of private alternatives, chances are that you will be able to better manage your loans. This is because federal student loans tend to have a lower rate of interest (when compared to private alternatives). They also have more flexible repayment options, income-based repayment and opportunities for loan forgiveness-all of these features help students pay off their debt in a more convenient manner. Private student loans, while a good source of funding if you’ve run out of federal aid eligibility, may not come with the same benefits and guarantees.
But if you have more than one student loan and are having trouble managing multiple payments every month, then student loan consolidation may be what you’re looking for. Student loan consolidation combines your outstanding private student loans into a single loan with a single interest rate and monthly payment. It can also help lower the interest rate of your loan (if your credit score has improved since you originally borrowed). This can make it easier to pay off your student loans. To find the right student loan consolidation product for you, use the comparison tool on this website.
Credit card debt management for college students
Studies show that college students are under the illusion that credit cards are free money; unlike mortgages, car payments, or student loans, credit cards with their high interest fees and rates is bad and expensive debt. The average college student today has four or more credit cards!
Another myth is students believe they need credit cards to build a credit history. Students can establish good credit by signing up for accounts with services and utilities – such as cell phones, cable, electricity or heat. It only takes six months to establish good credit.
There are fees for the privilege of credit. When you purchase an item on credit, you will pay more than if you purchased the exact same item with cash. Remember, the creditor makes money by charging interest each day that you carry an outstanding balance.
Also, don’t fall for credit card “teaser” rates or low, introductory rates. Those rates are temporary and serve to lure you to apply for that credit card. When you make the minimum payments, you may end up paying two times or three times as much for that item you bought. It would take you years, depending on how much you owe, to pay that card off. Try to pay your credit card balance in full and if you can’t pay the balance, then pay more than the minimum.
Take charge of your debt. Determine how much is owed, when payments are due, and what the finance charges are. Pay your credit cards on time, missed or late payments can result in costly late fees, higher interest rates (28%-30%), and negative marks on your credit report. That is not an illusion, but reality.
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