By Mike Considine
These days, most students finish their education with a degree and a whole pile of loans to pay back. Usually, there are multiple loans from more than one lender at several different interest rates. If this is the position you are in, you may want to look into student loan refinance.
When you refinance your student loans, you consolidate them into one, usually at a lower interest rate. You may also pay back your loan over a longer period of time. Both of these will result in a lower monthly payment. Bear in mind, though, extending the length of your loan repayment will result in you paying more money when you are done.
Your loan grace period is the best time for refinancing student loans. This is the six months you normally have after graduating until you need to start making payments on your loans. Try to get your research completed and decide on a company to refinance with before these six months are up.
There are many companies offering student loan refinancing, and offers seem to be thrown at you daily. However, some of these companies are not reputable and may end up costing you more. Check that the companies you are considering are licensed. You might also ask for recommendations from friends who have already been through the process.
Write down all the loans that you have and their interest rates. The loan consolidation companies will ask you for this information. If you have both Federal and private loans, you will want to consolidate them separately. Federal loans normally have a much lower interest rate so if you join them with your other loans you will lose money.
Get a copy of your credit report. Loan companies make part of their decision on what to offer you based on your credit rating. If yours is not the best, see if you can improve on it before you get your refinancing. You want to look like you are a good credit risk.
As you are comparing different programs, ask about what types of incentives they have. There are often discounts available for making automatic payments. Paying on-time is another way you may be able to save. Usually, there is a set number of on-time payments you need to make to qualify for and retain the discount.
Do you research carefully ahead of time, as you can normally only refinance your loans once. You need to be sure you have the best deal you can get. Also observe the customer service you are receiving. Some companies are impossible to get on the phone, for example.
It is all too easy to end school with an enormous amount of debt. Loans are so easy to sign for, and needed, while you are trying to finish your education. But we do not think so much about the repayment, which always comes far more quickly than we are prepared for. Help yourself and look into options for a student loan refinance as early as you can.
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