By Rikki Chadwick
Why is student loan refinancing is a step that so many look into?
Chances are, when you were first applying for student loans and receiving them, you were just so happy to get the money to continue your education; you didn't really grasp the long term ramifications of having to pay them back.
Oh, you knew that someday you would have to, but knowing that you'd have to deal with something sometime in the future, and having to deal with it now are two very different animals.
If you are now at the point where you need to start relieving yourself of the burden of your debt, it's like a black cloud of uncertainty hanging over your head. Will you be able to pay it back? Are you making enough of an income to cover your monthly repayments?
Student loan refinancing can be a practical step to take, especially if your loan payments are going to make it nearly impossible for you to eat and pay your other expenses. However, before you move forward, it's imperative that you understand the pros and cons of refinancing your loans.
First of all, in restructuring or refinancing your student loans, you'll be combining everything into one new loan. The lower interest rate that you should end up paying will mean saving hundreds, maybe even thousands of dollars over the life of your student loans.
If you find that you are falling behind on your payments because what you owe monthly is just too hard for you to meet, refinancing your loan is the smart thing to do. But you need to realize that by lowering your monthly payments, you are actually extending the life of your loan. So, even though you should be saving money with the refinance, you're going to have that debt hanging over your head even longer.
So, before moving forward, make sure you consider all of your options, and decide what you can live with. Unfortunately, none of us can forecast with complete accuracy where our lives will be years from now. Sometimes it's better to err on the side of caution.
Do you best to pay off your student loans as quickly as possible, but if your current financial burden is impossible to carry, think carefully about refinancing your loan.
But what kind of interest rates will you be charged when you refinance or consolidate your loans? What about student loan forgiveness? Find the answers to these and several more questions at Indebted Student Loans.
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Student Loan Refinancing - A Good Idea?
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