Refinancing Student Loans
Refinancing is a form of loan replacement. Essentially, the borrower asks for a new loan product that will stand in place of the previous product, and once that new loan has been approved, the old one is cancelled altogether. Typically, this is the sort of step savvy borrowers take when borrowing money is inexpensive. By refinancing, they can get rid of their high-interest-rate loans and get a new product that might have more favorable terms. It’s not surprising then that many people find the idea of private student loan refinancing so appealing.
Student Loan Forgiveness
Those who hope to refinance student loans may face fees and other unexpected surprises, so it makes sense to ensure that all avenues have been explored before families investigate the refinance option. Sometimes, people find that the loans they’re dealing with are eligible for student loan forgiveness programs and don’t even know it.
As an example, in an article in the Observer in New York, experts suggest that about 25 percent of people at work in the United States are eligible to participate in loan forgiveness programs. Typically, people must have a decade of on-time payments behind them, and the balance of the loan could just disappear, if a few key requirements are met. Those who qualify might not even need to learn about student loan refinance options.
However beneficial a loan forgiveness program might be, not all students will qualify. Those who have private loans aren’t eligible, for example, and those who have a spotty payment record might also be left out of the loop. Refinancing could allow people like this to get loan relief, and it could take hold almost immediately.Refinancing could also be a good option for those students who have experienced a tremendous change in their fortunes in the years that have followed graduation. Where their original loan was based on no income and a nonexistent credit history, a refinance might be based on:
- A good income
- The value of assets, like a house or a car
- An excellent credit score
- A steady relationship with a bank
All of these factors could allow students to lock in a loan at a low interest rate, making the idea of refinancing more than worthwhile.
Finding a Lender
While this option might be enticing for many students, the Consumer Financial Protection Bureau suggests that few banks offer refinancing for student loans. The financial institutions might feel as though the loans have a low profitability rate, or they might find that few people sign up for these products. In any case, there are at least a few banks that do offer these products. We can help you find them.
Click on our Consolidation button, and you’ll be taken to a form you can use to provide your name, your school, the year in which you’ll graduate, and the amount you think you’ll need in order to cover your existing loan. We can provide you with loans that can meet your needs, and clicking on those loans will bring you to the site of the bank that offers the loan. It’s quick, easy and free to get started.
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