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Why You Should Refinance Your Student Loans

Why You Should Refinance Your Student Loans

Does student loan refinancing confuse you just a little bit it confuses me too so don’t worry that’s what i’m here to help you with today .

And most productive life all right so before we get into exactly why student loan refinancing is helpful let’s talk about what refinancing actually is refinancing in general is just the act of taking your current debt obligations and replacing it with a new loan with new terms overall the whole point is to have better and more favorable terms when you .

Do make that switch basically what happens in refinancing is that as a borrower you would basically take out a new loan that is for the complete amount of all your student loans and then that loan would then completely pay your past student loans and it would consolidate it all into one loan now in general again you want those terms to change in a good way and specifically those terms include Monthly payments interest rates and the length of your loan term now all of these things depending on which way it goes can really help your overall financial stability how you pay off your loan how quickly you pay off your loan and all of those details it basically allows borrowers to redo their loan to again hopefully find better rates.

Better terms and just something that works for you as a borrower better so now that we kind of understand what refinancing means let’s go into why you would actually want to do this for student loans the first and main reason is to get a more affordable loan overall as we all know student loans are not cheap and interest rates ,

specifically are extremely extremely high For student loans so i would say that the main reason you would really want to refinance would be to bring that interest rate down i would say an average student loan interest rate is 10 to 15 percent and that is extremely extremely high .

So your goal would be to bring it down to about four to five percent now for most of us who are in health care the average health care student loan is about two hundred thousand Dollars so on two hundred thousand 000, if you have a 10 to 15 interest rate you can imagine that that’s thousands and thousands of dollars and if you can even get that down to five or six percent that’s really good and it lowers the amount of interest you have to pay now we all know that interest is kind of a waste of money we’re just paying money the more our loan sits there so,

The lower you can bring that the better now with having a more affordable student loan other things matter as well interest rate is not the only factor that we should look at the other factor that you can change when you’re looking to refinance is the actual length of your student loan so usually you know you’re paying it off in 10 15 20 years and you choose that when you,

Get your student loan at the beginning when you refinance that you can choose to do it in a quicker time period you can kind of choose all those variables and just decide how much you want to pay per month and how long it’s going to take you to pay it off of course longer repayment times so maybe 20 25 years would mean that you have less of a monthly payment but it’s gonna take you longer to Actually get rid of that loan versus if you were to have really really high monthly payments your term length would probably be way shorter so again just depending on where you are financially what makes sense for you you have all these options to make it work for you.

This is why refinancing is so so beneficial the next reason you would want to refinance your student loan is to Streamline your payments now speaking from personal experience i was shopping around while i was getting my student loans for various interest rates and so every year i had a loan from a different bank so one thing that refinancing can do like i mentioned is consolidate all of them so that’s exactly what i did i did refinance my student loans after i graduated And all my different loans that were at different banks all got consolidated into one this is really convenient because instead of paying monthly payments to two three four different banks you only have one place where your loan is and you only have one monthly payment it’s a lot easier to track and again especially.

If your interest rate is lower it just makes So much sense the next reason you might want to refinance is because of the options it gives you in terms of a cosigner now a lot of us when we’re in school we need a cosigner for our student loans which is usually apparent just because of our age and lack of responsibility and lack of financial backing but when you graduate and get a job and are looking to refinance.

You most likely have the option of either having a cosigner or not having a cosigner now this again can really be helpful in terms of that cosigner’s debt once their name is on it they own that debt too so if that’s something that they don’t want or you don’t want to give someone else then that’s a really nice option and again you don’t have to be stuck to a cosigner you can of course always have a cosigner.

So that’s not a problem but again it opens up the options and my last reason you would want to refinance is because it will help your overall financial health if you have loans in multiple different places it’s really easy to not only miss payments but really not know what’s going on if you refinance and consolidate it all into one place not only are your payments going To be better because you’ve chosen your own terms not only is your interest rate gonna be better because again the whole goal is to make that lower but it’s easier to then make those payments and when you don’t miss payments that really helps your credit score missed payments negatively impact a credit score and you don’t want that to happen.

So make it easy on yourself refinance your student loans put it all in one place so you don’t miss your payments and that way it’s not negatively impacting your credit score as we all know our credit score is incredibly important for our general financial health so that’s what i mean by when i say that this is really going to help your overall financial health and as a plus side if you’re gonna go through this

Whole process you’re probably gonna learn a lot about money loans and student loans specifically so again that’s probably gonna help your financial literacy in general and the health of your financial profile now although there’s a lot of benefits to refinancing a student loan sometimes it might not be the best option so i really want you guys to look into this In terms of your own profile the first reason this might not be a great idea for you is if you don’t have a great credit score you’re only going to get a lower interest rate.

If your credit score is good and so if you don’t have a great credit score it might not lower it that much or it might not lower it at all and then it might not be worth it so again this is a very specific thing to your own Financial profile so i can’t tell you exactly what to do but definitely look into it you can definitely get appraisals and see with your credit score you know how much your interest rate would lower depending on your loan amount and you can get that without you know signing something so definitely do that before deciding to refinance or not and the second reason you might not want to refinance is if you’re not eligible.

Not everyone is eligible there’s many things that actually go into refinancing so overall i would just like to say that definitely assess your own financial situation and see if refinancing is actually right for you now because we’re talking about student loans.

I want to be sure to mention one of trusted partners is actually a company that helps you with your student loans or any type Of refinancing and they basically use the power of group buying to get you and me the lowest interest rate possible for our student loans now again how they do this is by group buying so they go to banks and let them know that hey i have a lot of people who are going to come through me and because of that they get the lowest interest rate.

Possible if you and i were to go shop on our own for student loans which again i have done i guarantee you we won’t find as low of an interest rate as juno can provide us now one thing i want to mention is juno is actually completely free to use for you and i all we do is go through them like a normal bank it doesn’t cost us anything to get a loan through them again at the best interest rate possible.

So if you’re anyway in the market for student loans and low interest rates then you might as well go through juno because again you’re kind of guaranteed getting a lower interest rate than you could on your own now i would never talk about a brand here on that i did not completely trust juno is actually founded by two harvard graduate students and they have helped thousands of Students globally get the lowest interest rate possible on their student loans and with refinancing you can of course do it more than one time.

So every time you need it you can go through juno juno also has an array of financial literacy resources on their website and on their instagram so so even if you guys want to just check them out to learn about something new.

Source:-FocusRx

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