| Your Main Goal | | | | need to set your priorities before you begin |
| Before you begin thinking about how to refinance | | | | implementing your plan to refinance your student |
| your student loan, think about what your real goal is. | | | | loan. |
| Most people in your position will want to reduce their | | | | Federal vs. Private Loans |
| monthly costs. Others may simply want to | | | | Like many other people, you may have more than |
| consolidate all their loans into a single payment. | | | | one type of loan; some being private loans and |
| Whichever way you go, you'll want to set a goal | | | | others being Federal loans. Because of the way |
| before you begin planning. | | | | Federal loans are structured, you can get a much |
| That said, when you refinance your student loan | | | | lower interest rate on them than you can on private |
| there are several things to consider. | | | | loans. On the other hand, private student loans are |
| First things first | | | | basically personal loans made with the assumption |
| Regardless of the lender you work with when you | | | | that your income will increase with more education. |
| refinance your student loan, there will be certain | | | | That said, make sure that you refinance these |
| qualifications you will have to meet. One almost | | | | student loans separately. If you consolidate these |
| universal qualification is that none of your outstanding | | | | types of loans into a single package, you may find |
| loans are allowed to have what is called "in-school" | | | | yourself paying much more on the combined loans |
| status. In other words, you cannot be currently | | | | than you need to. |
| paying for your education with an active loan. | | | | Your Credit Score |
| Another requirement is that many lending institutions | | | | Before your refinance a student loan be certain that |
| set a minimum balance. That amount will vary from | | | | your FICO score is high enough to make you a solid |
| lender to lender, so make sure you know upfront | | | | bet to the lending institution of your choice.These |
| what that balance is before you spend too much | | | | days no one has an excuse for not looking at their |
| time with that lender. | | | | credit report -- you can get a free copy of it every |
| Two ways to refinance your student loan | | | | twelve months from each of the three major credit |
| When you refinance your student loan you can | | | | reporting agencies. Do it now. Then take the time to |
| reduce your monthly payments one of two ways: | | | | review your credit report. If you find inconsistencies |
| - Getting a lower interest rate | | | | or problems, clear them up now. It will pay off in |
| - Extending the duration of your loan | | | | lower interest rates and better terms when you |
| Most people will try to get the lowest interest rate | | | | finally refinance your student loan. |
| possible because this will mean you will pay far less in | | | | Summary |
| total interest costs by the time you have paid off | | | | Ultimately when you refinance your student loan, |
| your loan. | | | | your goal should be to make your career -- and the |
| That said, if you can't get the lowest interest rates | | | | rest of your life -- more manageable once you leave |
| you should consider the refinance of your student | | | | school. Be intelligent about investigating all the choices |
| loan by extending the term of your loan. When you | | | | you might have before you make an informed |
| do this, your monthly payments will be lower. The | | | | decision. If you're careful, you won't be bogged down |
| downside is that the total dollars you pay for interest | | | | for the rest of your life paying back your loans. |
| will be substantially higher. So, as stated above, you | | | | |