Refinancing Student Loans

refinancing loansRefinancing 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.

Finding a Lender

student seeking lenderWhile 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.

 
Need a private student loan? Compare your student loan options all in one place. SimpleTuition


Borrowing Advice