Is Now the Time to Refinance?

time to refinance student loans

BIG Ideas:

  • If refinance rates are lower than the interest rate you are currently paying on your student loans, now may be the right time to refinance.
  • If you do refinance and rates drop, you can always refinance again – usually at no additional cost.
  • If you think you qualify for federal student loan benefits, like income-based repayment and loan forgiveness, refinancing federal loans to private loans may not make sense for you.

Summer is in the books. That makes now a great time to get down to business – or more specifically, the business of taking charge of your financial life, including those budget-busting student loan payments.

You can do it!

Yup, you could make your payments more manageable by refinancing federal student loans to a private loan now – even if you might be waiting for interest rates to go down later in the year, as some experts are predicting.

A Strong Argument to Refinance

Private student loan rates currently offered may be lower than the rates you’re currently paying on federal loans, which means refinancing now, instead of waiting for rates to fall, could be a wise move. And if rates do drop, no problem; you can always refinance with Brazos again –  with no origination fee.

There are a lot of great reasons to refinance student loans, including:

  • Lowering your monthly payments by paying a lower rate of interest.
  • Shortening the term of your loan to help you pay off your loans sooner.
  • Lengthening the term of your loan to make your monthly payments even more manageable. But, it is important to keep in mind that extending your loan term could cost you more in interest.
  • Consolidating multiple loans into one loan with one monthly payment.
  • Removing a co-signer on your loan.

Steps to Take Before You Refinance

Interested in student loan refinancing? Here are some steps you can take to move forward:

  • Take inventory of all your current loans. Specifically, you’ll need to answer the following questions:
    • Is your loan with the federal government or a private lender, such as a bank, financial institution, or non-profit lender like Brazos?
    • What’s the loan term (the amount of time you have to pay off the loan)?
    • Is the loan in repayment? If so, how many payments do you have left?
    • Who is the servicer of the loan? In other words, who are you making your payments to?
    • What’s the total amount you owe on all your student loans? Add up all your payments.
  • Compare current rates with the rates on your rates. Next, use our helpful calculator and see if any of the rates shown are lower than the rate you’re currently paying. If the refinance rate is less than your student loan interest rate, now may be a great time to refinance.

When Refinancing May Not Be the Right Move

Before you move forward with refinancing, there’s an important question you need to consider if you have federal loans: Do you want to take advantage of federal student loan benefits like income-driven repayment or loan forgiveness if you meet the eligibility requirements? If you do, refinancing to a private student loan wouldn’t be the right move, since you’ll no longer be eligible for those federal loan benefits.

Brazos is here to help you decide the best option for you

We understand that you may have more questions about student loan refinancing. That’s why, we’re here to help you decide the best option. You can also use our helpful Refinance Guide to learn a little more.

And if you decide you’re ready to move forward with refinancing, we can help you save even more. As a Texas non-profit, we can offer you BIG savings on the refinance student loan that’s right for you. Contact us today!