Refinancing Student Loans Is Easier Than You Think
By refinancing student loans, you could reduce the total cost of your existing student loans or your current monthly payment (or maybe even both!). Depending on how long you’ve been out of school, your annual income and credit history may have improved. By refinancing your existing student loans you may see a dramatic reduction in your interest rate – even a few points can make a difference in your montly payments.
By the time you graduated from your baccalaureate program, how many student loans had you accumulated? If the answer is more than one, you may have multiple loan providers and repayment schedules. Add in graduate school and more loans, and, balancing all these different payment schedules—not to mention making all those payments—might be a challenge. Another great reason to consider refinancing and consolidating!
Deciding Whether to Consolidate Student Loans
Whether to consolidate student loans is a big decision, with several factors to consider. This might include the amount of debt you have, your current and near future income and financial situation, the number and terms of separate loans you currently have, and your personal preferences, to name a few. Once you consolidate, though, there’s no going back, so it’s important to look at your options. Here’s a brief guide to some basic considerations when deciding whether or how to consolidate student loans.
Your Current Finances
Each of your student loans, particularly federal student loans, may have different repayment, deferment, and forbearance options, aimed to help you repay your student loan debt in a way that is convenient for you. But if you have multiple payments to make each month, that might add up. If your income currently and in the near future is low enough to make repayment difficult, consolidation might be an appealing option. Consolidation loans might combine any compatible loans into one payment, possibly even with a lower interest rate and lower monthly obligations. Why might it be lower? Because consolidation loans might allow you to pay off your student loans over a longer period of time, should you qualify, adjusting the minimum monthly payment accordingly.
Your Long Term Finances
While lower minimum monthly payments might be an attractive option, there may be drawbacks to this. That’s because the longer it takes to repay a loan, the longer there is for interest to accrue on the outstanding amount. Depending on your student loan terms, such as whether you are subject to capital interest, you might be required to pay interest on the interest that has already accrued. If you can afford to continue making sufficient monthly payments on each of your outstanding loans, you might pay less money in the long run than if you consolidated.
Different Loan Terms
If you are eligible and choose to consolidate your student debt, you may be subject to new loan terms. Depending what those terms are, that might be a positive or negative. For example, if your original loans had flexible repayment options that you couldn’t get with the consolidation loan, you might lose access to that benefit. Make sure you familiarize yourself with all your benefits and options, both on your current loans and the potential consolidation loan, to make sure you’re not losing something you would rather keep. On the other hand, your consolidation loan might have new benefits that make up for the ones you lose. You might be able to consolidate under a lower fixed interest rate. If interest skyrockets, you’ll get to keep your lower rate. Of course if interest drops below your fixed rate, you might be stuck with the higher amount. As mentioned above, other potential benefits of consolidation might include lower minimum monthly payments and longer repayment periods, making repayment easier in the short term. Plus, once you’re able to do so comfortably, you might later be able to increase your payments and repay your consolidation loan faster, depending on the terms of your loan.
At the end of the day, depending on your situation, consolidation might just be the more convenient option. Reducing your student loan payments each month from several to one might be easier for you to remember, not to mention easier to budget. Even if you pay more long term, you might decide that easing up your budget in the short term is enough of a benefit to make up for the increased duration. Whether it’s a matter of how far you can stretch your paycheck, wanting to increase your savings, or just your personal preference, the convenience of a consolidation loan might be a major factor in your decision.
Refinance Student Loans With Our Featured Partners
CommonBond Variable Rate Loan
- Savings: Variable rates as low as 2.57% APR (with auto pay discount). Save $24,0461, on average, over the life of the loan.
- No fees: There is no origination fee or prepayment penalty when you refinance.
- Service: CommonBond’s amazing care team is there every step of the way via phone, live chat or email...however you want to connect with us, we have you covered.
- Simplicity: Get your rate estimate in 2 minutes. On the go? You can complete your application on your smartphone.
- Social impact: Your loan will not only save you money but will make a difference in someone else's life through our Social Promise. For every degree fully funded on the CommonBond platform, we fund the tuition of a child in the developing world through our partnership with Pencils of Promise.
College Ave Student Loan Refi
- Competitive fixed and variable rates
- Earn a 0.25% interest rate reduction when you enroll in auto-pay2
- Receive an additional 0.25% interest rate reduction if your autopay is linked to a Nationwide Bank checking or savings account3
- Refinance amounts as low as $5,000 (federal & private)4
- Simple: Apply in 3 minutes or less – no application or origination fees
- Flexible term choice: Choose any term from 5 to 15 years
- Start making full monthly payments right away, or pay just the interest charges for the first 2 years
LendKey Network Student Loan Refinancing
- Simplify your fiancances: Refinancing of private and federal loans for undergraduate and graduate degrees
- Variable rates as low as 2.56% APR (with autopay)
- Save $16,0005, on average, over the life of the loan.
- No fees or prepayment penalties
- Choice of fixed or variable rates
The above are estimates intended to be used for comparison purposes only. To review official loan terms and disclosures , you will need to visit each lender's website directly. In order to apply for a loan, you must contact the lender directly. We have provided a convenient way for you to reach each participating lender's online application via the 'Apply' button. In all cases, you must read all of the disclosures and terms of the loan programs being presented on each lender's website prior to applying for a loan. The lender, upon approving you for financing, will provide final information about the terms under which they agree to make financing available to you. It is your responsibility to review the loan program's terms, disclosures and promissory note carefully. Approval for financing lies solely with the lender with which you apply. eStudentLoan is not providing a representation or warranty about your eligibility to receive a private student loan.
1. Savings calculation of $24,046 is based on student loans refinanced with CommonBond between 1/1/17 and 1/31/17. Savings is calculated as the difference between borrowers’ estimated future payments for their previously held loans and their future expected payments after refinancing with CommonBond. The calculation is a weighted average dollar savings of CommonBond refinance loans and assumes interest rates will not change over time, members make all payments on time, members enroll in ACH, and they do not pre-pay their loans. CommonBond's average savings methodology excludes refinance loans during the period mentioned above in which members elect a refinance loan with longer maturity than their existing student loans, the term length of the member’s original student loan(s) is greater is than 30 years, and the member did not provide sufficient information regarding his or her outstanding balance, loan type, APR, or current monthly payment.
2. The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account. The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
3. Borrowers can take advantage of an additional 0.25% interest rate reduction if the automatic withdrawal comes from a qualifying Nationwide Bank account for a total interest rate reduction of 0.50%.
4. $5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
5. The average total savings for Lendkey was calculated by subtracting the estimated lifetime cost of the borrowers’ student loans refinanced with a lender via LendKey’s platform between 1/1/16 and 9/30/2017 from the estimated lifetime cost of the borrowers’ existing student loans they had prior to refinancing. The following assumptions were used in the calculation: (1) the borrowers make on-time payments of all amounts that are due; (2) the interest rate remains static (Note: variable interest rates may move lower or higher throughout the loan term); and (3) the loans are not prepaid. The calculation excludes: (1) loans in which the loan term selected for the refinancing is longer than the term of the prior loan term; and (2) loans where the information we have is incomplete or inaccurate, including loans where the indicated monthly payment would not pay off the loan balance by the end of the loan term.