| Refinancing is the process of paying off one loan by | | | | refinancing make sure your credit history is in good |
| obtaining another loan which is usually at a lower | | | | shape. By contrast, rates for refinancing federal |
| interest rate or with better terms. When it comes to | | | | student loans change only once a year on the first of |
| student loans it's generally done to reduce monthly | | | | July. While currently pretty low, they are subject to |
| student loan payments. There are several ways to | | | | annual fluctuation. |
| accomplish this through student loan consolidation | | | | Lenders have different qualifications for refinancing, |
| programs through banks or programs through the | | | | although most require that none of your loans have |
| government. | | | | an "in-school" status which means that you can't be |
| When refinancing your student loans there are | | | | paying for a student still enrolled in college. With some |
| several things to consider. If you have both federal | | | | lenders there is an arbitrary, minimum balance for |
| student loans and private loans, you will have to | | | | application. |
| refinance them separately. With federal loans, you | | | | When refinancing look for a couple options to make |
| can usually receive a lower interest rate than with | | | | your repayment life easier. Reduce your monthly |
| private loans. Private student loans are personal loans | | | | payments by either negotiating a lower interest rate |
| based on the assumption that the income level will | | | | or extending the duration of the loan. Getting a lower |
| increase with more education. Therefore, refinancing | | | | interest rate is the better course as you are also |
| is rated at a much higher level. If you were to mix | | | | reducing your long-term |
| the two together when you refinance, you would | | | | When figuring out how-to refinance student loans, |
| wind up paying a higher interest rate on the | | | | remember that you can reduce your monthly |
| combined principal than you would if you financed the | | | | payments either by getting a lower interest rate, or |
| two loans separately. | | | | by extending the duration of your loan. Of the two |
| Shop around because student loan rates vary by | | | | methods, getting a lower interest rate is preferable |
| lender. Check out your credit scores prior to applying. | | | | since you are also reducing your long-term student |
| Rates are based on your credit history. Before | | | | loan debt rather than just spreading out repayments. |