Top 6 Reasons to Refinance Your Student Loans

Consolidating and Refinancing your student loan debt can help modify your existing student loans to save money, it helps you get out of debt faster, and eliminate a lot of headaches!

Here are our Top 6 reasons to refinance your student loans:

1) Receive a Lower Interest Rate (  pay less interest!)

By considering that you have a steady monthly income and good credit score, the risk as a student loan borrower to the bank decreased since you already borrowed student loans. Some banks are willing to lower your interest rate at student loans through refinancing because of the decrease risk in the credit score. 

By lowering the interest rate you earn less interest to save money and have a better chance of eliminating your debt loan faster student!

2) Decrease Your Monthly Payments

Financing your student loans can mean a lower interest rate, but may also change your repayment terms. Most of the private and federal loans have a 10-year repayment term by default . Student loan refinancing options vary bank by bank, but most typical options include 5, 10, 15, 20 years of term . This means that your monthly payments will drop significantly, if your current loan has a repayment period of 10 years and refinance to a term of 20 years, .

Smart Money Tip: Although your monthly payments will go down, be careful as you could accumulate more interest and end up paying more in the long run!

3) Get a Flexible Repayment Plan

Not much, but some banks offer alternative  repayment plans for student loans. While your federal loan options include many great benefits such as Pay As You Earn, Repayment based on income, and income contingent repayment, private student loans generally have limited repayment programs such as interest only payments, Grace period and Economic Hardship Deferment etc.

These federal repayment options are tools to help lower monthly payments and you manage your debt in the first years out of school. Keep in mind, most federal repayment plans will also charge more interest over long-term period.

4) Release Of Co-signer from Your Student Loan

Lets say if your parents are your student loan co-signers, you already know the stress it adds to your relationships. 

By refinancing with a private lender, you may be eligible to free your co-signer from your loan. The co-signer can then improve their credit score and have access to new financial capital lines to help buy expensive items such as a house, a car, and even start a business.

Here are two banks that offer the co-signer release:

• Citizens Bank
• CuStudentLoans

5) Proceed to a New Bank that Really Cares About You ...

Most users that we are talking about are not happy with the level of provided student loan service. Refinancing your student loans, gives you the option to switch to a new bank that has an excellent customer service record and a better balance of work with borrowers of student loans.

6) Consolidate Multiple Student Loans and Make it Easy to Manage Them

Did you know that the average borrower has 7 loans with 2-3 different student loan managers? This can get confusing to manage, especially if your student loans are sold to other banks after every few years. 

The Refinancing of your student loans can help you consolidate multiple student loans into a single debt, and it makes your student loan debt very simple to organize, track and pay.