If student loans are making you feel overwhelmed, you’re not alone. Here are five fundamentals everyone should know about student loan refinancing; so you can take control of your financial health and your student loans.
1. Refinancing Can Lower Your Payments
Refinancing offers you the opportunity to start a brand new loan term. You can choose to extend the length of the loan in order to reduce your monthly payments.
And Reduce Your Interest Rate
Many people refinance their student loans once they become eligible for a better interest rate by improving or building their credit history. By lowering your student loan interest rate, you could owe less in monthly payments and save money over the life of your loan(s).
2. Your Refinancing Choices Are Flexible
When refinancing with HUECU, you have two basic interest rate choices–fixed and variable. With a fixed rate loan, you will pay the same interest rate across the entire life of the loan. A variable rate loan, on the other hand, will be adjusted depending on the U.S. Prime Rate. Variable rate loans may offer lower rates even if they do offer less consistency in your monthly payment.
3. Consolidation versus Refinancing
Both consolidation and refinancing combine various student loans into one loan, but the results will differ between consolidating with the federal government and refinancing through a private lender. If you consolidate through the federal government, a weighted average of your interest rates is used to determine your new rate. When refinancing with HUECU, we will take your financial situation into consideration, so you might qualify for an even lower rate.
4. Refinancing Is a Good Way to Release Your Co-signer
Refinancing your student loans is an easy way to release a co-signer and take full responsibility for your debt once you find yourself in a stable financial position post-graduation.
5. A Better Credit Score Means Better Refinancing Options
As you’re learning more about student loan refinancing, also take the time to learn more about your credit health and score. Good credit will help you get a better interest rate when refinancing a loan.
For more information on refinancing your student loans, click here.