What is Student Loan?
When you want to enroll to the college, like most of the students you will need lots of money for your expenses such as accommodation, books or other stuff. At that you can have 3 options; federal loan, private loan or both of them. Federal loans are given by the government or the charities which is approved by the government. Private loans are given by the private companies or the private lenders.
How will you pay back?
Pay back is regulated according to your payment power. Some of the students start to work while studying. These people start to pay after they start college. But most of the students start to pay after they graduate. Interest rates can change according to these payment plan. Also the amount can change.
What is Refinancing Student Loans?
After graduation, maybe things will not be able to go as you wish. At these times refinancing can be considered as a good option. At the past, higher interest rates were so difficult to pay. Due to these problem people used to have difficulties to pay back. Then the lenders released this term to make it easier for people to pay it back.
Student Loan Refinancing is the process to get a new loan to pay your old loan with new interest rate. You can hope to pay it with lower interest rate. This type of process can be done to both private and federal loan. But it can’t be applied to the federal loan. The only options are for private loans and the mixture of federal and private loan.
What are the interest rates?
Mostly interest rates are as high as the normal student loan. However, some of them start from 7% up to 25%. These interest rates are decided according to the amount that you want and the term that you want to pay in.
Should you refinance your Student Loan?
Refinancing student loan is not something easy because you pay your debt by getting another debt. There are good sides and also there can be good sides if you do not plan it very well. Please check cons and pros before do it. Also for federal loans there are some options to make it easier for you. Income driven repayment (IDR) plans, Loan forgiveness, Deferment and forbearance are some plans for federal loans.
What should I check before refinance?
First, you should check the offers about fixed or variable interest rates. It is one of the biggest concerns that you need to think of. Also, whether you can save money or not with their interest rates. If you can save some with the new interest rates it is good for you to do it. Also payment options and monthly payments are the last thing to think about. Whether you can pay these amounts monthly or not must be your another biggest concern. When you can not pay it, there can be bigger problems that you have already have. Our suggestion for you, you should be careful before deciding. After you decide also you must be careful and check every detail.