If you are a recent college grad who has acquired tens of thousands of dollars of debt in pursuit of your degree, it can be overwhelming and anxiety-inducing. This is especially true if you were unable to secure a job right after graduation, or you were only able to get work in retail sales. Thankfully, refinancing student loans is always an option. However, there are some things you should know before attempting to refinance student loans. This post will highlight all the information you need to know to be fully prepared to find the right loan refinancing provider for you.
What Is Refinancing?
In order to take control of your debt, you need to know what exactly you are dealing with. So, do you actually know what refinancing entails? Refinancing is just a financial term for taking on another loan to cover your student loans, then paying the money back to the lender over a set length of time at an agreed upon interest rate. This type of student loan consolidation is offered only through private lenders, so it is not for everyone. The reason that many post-grads choose to refinance their student loans is because it secures them a lower interest rate. Now that you know what refinancing is, you have to determine if this solution is right for you.
Is Student Loan Refinancing Right For Me?
Refinancing is only a viable option for a specific group of college graduates, unlike no experience jobs. In order to refinance your student loan, you are going to need a good credit score, a secure, well-paying job or a co-signer. If you have better financial health than you did when you initially signed the paperwork for these student loans, this will enable you to secure lower interest rates. And over the course of a lengthy repayment period, that interest can really add up. So, if you have a better credit score than you did when you took on your loans, or if you have a co-signer who does, you may want to consider refinancing a student loan.
Student Loan Interest Rates
Student loan interest rates are tied to your financial health and credit. This is still true when you are trying to refinance a student loan. Make sure you are actively working on improving your credit score before you attempt to refinance a student loan. Otherwise, you will not get a much better rate than you already had previously. If you want to refinance student loans or consolidate student loans, make sure you improve your credit rating.
What About Student Loan Consolidation?
Consolidating student loans is another way to turn several monthly loan payments into one easy-to-pay monthly bill. This is an excellent option for recent graduates that have not secured high-paying employment upon graduation. Loan consolidation is essentially the same as refinancing, you take out one large loan to pay back all your smaller loans and then repay them for a length of time with an agreed upon interest rate. However, you can consolidate student loans without ever needing to do business in the private sector. Their are both private and federal loan consolidation options. If you are not working a well-paying job, consolidation may be the best option for your student loans, depending on certain economic indicators at the time.
Where Should I Refinance My Student Loans?
If you have decided that you are ready to take the plunge and refinance your student loans, excellent. This is a great decision for your financial well-being both now and down the road. However, with so many options out there how do you know which bank to do business with? Here is some advice – you are going to want to price shop. But instead of price shopping, you are interest rate shopping. Find out what several banks are offering you before settling on one. And remember not to discredit certain online providers, as well. According to some reviews, these online student loan refinancing lenders offer some of the lowest interest rates around. So just be sure to do your research and you are sure to find the right student loan refinancing solution for your financial needs.
If you are a recent college grad who came out of school with not only a diploma but also a mountain of debt, navigating your finances can be scary and overwhelming. That is why we are here to help. This post has helped you figure out the basic options available to you for securing better payment plans and interest rates. Consider your financial health and determine whether refinancing or consolidating your student loans is better for you. Then, be sure to price shop and research several lenders before making your decision. Congratulations on your graduation and good luck in your career!
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