If you have student loans, you’ve maybe heard about the option to refinance them. Those who have never done this, or don’t have much experience as borrowers, might not have a thorough understanding of what refinancing is and why it makes sense.
Refinancing is getting a new loan to replace one already in your name. You generally want to refinance your student loans if you believe there’s an offer out there that will save you money. Even if you’re currently comfortable with your ability to repay your current loan obligation, refinancing can potentially put you on even better financial footing. Tools like the ones offered by Purefy allow you to visualize competitive interest rates and compare the best companies for student refinancing, helping you achieve your ideal financial situation.
Here’s how to know when you should refinance your student loans.
Who Should Consider Refinancing Their Student Loans?
Anyone thinking about whether they should refinance their student loans should run their situation through a quick checklist. If you’re checking one or more of the following, it might be a good idea for you to start investigating a student loan refinance:
– You have private loans – Some people might want to think twice before refinancing federal loans, as these come with benefits like income-driven repayment, Public Service Loan Forgiveness, and even interest and payment deferral through the CARES Act. Private loans, on the other hand, don’t come with any of these caveats, and should be refinanced as soon as it makes sense monetarily. Stay alert for opportunities to refinance private student loans.
– You’ll save money –If refinancing your student loans will help reduce the amount you owe—even by just a little bit—it’s probably worth it. Refinancing student loans is different than other forms of refinancing because it typically doesn’t require any kind of loan origination fee. This simplifies determining if refinancing makes sense or not.
– You can switch from a variable to fixed rate – A lot of people focus only on the percentage associated with their interest rate when taking out a loan and miss the fact that variable rates can drastically change over time. It might make sense to refinance if you can lock in a low or reasonable fixed rate, especially if your current loan has a variable one.
– Your credit is strong – Credit scores definitely play a role in how good an offer you’ll be able to get when refinancing student loans. Those with at least good credit—and especially great or excellent—should look to see how they might save money by refinancing student loans.
- You want to consolidate your loans – It can be confusing to deal with multiple loans from different lenders. Refinancing your student loans can potentially allow you to consolidate multiples loans into a single new one with better terms—both simplifying your life and improving your financial outlook.
Where to Look for Student Loan Refinancing
Once you’ve determined you’re an ideal candidate for refinancing your student loans, seek out the right opportunity to do so. Look around at individual lenders to see what they all have to offer, but this can be extremely time-consuming, and you still might not even end up with the best deal.
Juno is changing how people refinance private student loans. Instead of being a lender themselves, they negotiate with lending organizations to get the best possible deal for their group members. Lenders want to access their large pool of loan seekers, so they’re incentivized to get the best deal; while Juno only takes flat rate so they’re not swayed by any personal gains from promoting one offer over another. This is one of the easiest ways to get a great refinancing deal for your student loans.
Over 11 percent of student loans are currently delinquent. This is often a factor of individuals being unable to afford their loans. Even if you’re able to make your payments, refinancing student loans is a great way to give yourself a more solid financial foundation. 2
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