Refinance Student Loans

What’s The Best Way To Refinance My Student Loans?

So you’re done with school and you just got your first student loan bill. Did college really cost that much? Yes it did, and now you are faced with paying back the amount you borrowed when you went to college. On the plus side, hopefully you’re a college graduate now so you should be making the dough to be able to pay it back. But what if you’re not?

What if you haven’t found work yet? Or what if you’re just not happy with the interest rate you were given when you borrowed the money? What if you borrowed from several different lending agencies and you want to consolidate? The question is, will it be worth your while to refinance your student loans?

Refinancing And Your Credit

Before you refinance your student loans you need to ask yourself how your credit has been in the last 24 months. Have you been really good about paying your bills? Or have you maxed out your credit cards and only paid the minimum payments? All of these things are factors in determining your credit score which is going to determine the interest rate a lender gives you should you decide to refinance your student loans. Lenders typically look at the last two years of your credit history when making a decision, so make sure the last two years have been good ones credit wise, and if they haven’t, then work on the next two.

Federal Loans Versus Private Loans

If you have both federal and private loans you need to refinance them separately. Federal loans refinance at a much lower interest rate than private ones and the savings is worth having two payments. However, you can consolidate your private loans into one loan if you borrowed from multiple private lenders.

Watch Your Calendar!

The interest rates for student loans change on July 1 every year. So if you’re looking to refinance your student loans, either right before or right after that date is best. Pay attention to the rumors. If it sounds like the rates are going up, refinance your student loans before July 1. Likewise if it sounds like they’re going down, you want to wait to refinance until after that date.

If you think you’re ready to refinance your student loans, talk to your banker. Most banks have programs to consolidate or refinance student loans at very good interest rates, but they all have different requirements so you want to make sure you meet them. Finally, remember that your loans were taken out for a good cause. However you do it, you can pay the money back knowing it is money well spent!

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