You've finished college and have a Mt. Everest sized stack of student loans. What should you do? Student loan refinance companies offer options for reducing your interest rates and payment amounts. Your options depend on several factors including the amount and types of student loans you owe and the degree(s) you've earned. If you have federal student loans, you may lose certain benefits if you refinance your student loans with a private lender. According to the Consumer Financial Protection Bureau, if you have both federal and private student loans, your options may vary based on loan type. Get started by reviewing your student loans and listing their balances, interest rates, payment amounts and whether your loans are provided by the federal government or by private lenders such as a bank or credit union.
Shopping for Student Loan Refinance Options
Requesting quotes from multiple student loan refinance companies is a good way to shop for refinance options. Rates, lender fees, and terms and conditions can vary, so it's important to evaluate several student loan refinance quotes to find your best deal. While interest rates are important, it's important to check all costs associated with each loan quote as some lenders may offer very low interest rates, but make up for the discounted rate with extra fees and costs. If you have federal student loans, you'll want to consider options available from the U.S. Department of Education including consolidation, deferment and repayment options in addition to refinance options.
Soon after requesting student loan refinance quotes, prospective lenders may contact you to learn more about you and your student loan debt. When talking with prospective lenders, take notes and keep records of lenders and loan officers you've contacted. Ask questions and pay close attention to how your questions are answered; you'll want to choose a lender that you can trust to guide you in decision making. If you have more questions or concerns after speaking with prospective lenders, don't hesitate to ask for more information.
Student Loan Refinance Companies Offer Repayment Options
Your reasons for refinancing your student loans play a role in choosing how to refinance your student loans. Are you looking to pay off your loans faster at a lower rate? Do you need lower monthly payments? Are you looking for the best way to pay off your loans faster? Review student loan refinance quotes and pay attention to the APR, which stands for annual percentage rate. This is a calculation of the cost of a loan, including its interest rate and lender fees, expressed as an annual percentage of the loan amount. In general, loans offering the lowest APR cost less than refinance loans with higher APRs. The lower the loan cost, the faster your loan balance will be paid down.
Refinancing with a lower APR typically lowers minimum monthly payments. Check with lenders to see if you can prepay your loan without penalty; you can continue paying your original payment amount and pay off your loan faster. Please note that if your student loans are in default at the time of refinancing, you may not gain the advantage of lower monthly payments if past due interest is added to your loan balances.
Requesting loan quotes from online student loan refinance companies as well as local financial institutions provides broader and possibly less costly refinance options. Taking time to review multiple loan quotes, discuss your needs with several lenders and choosing student loan refinancing based on individual needs will help you find a good match for your needs.