Is refinancing your student loans right for you?
Ask yourself these questions?
Do you feel like it is going to take you forever to pay off your student loans?
Is your student loan interest rate too high?
Do you have trouble budgeting because of a variable interest rate?
Do you want to lower your interest rate, lower your payments or pay off your loans faster?
If you answered yes to any of the above, refinancing could be a great option for you to meet your financial needs.
Items to consider when making the decision to refinance your student loans:
- It is rarely a good idea to refinance at a higher interest rate. Look to refinance at a lower rate, or even refinance from a variable rate loan to a lower fixed rate loan.
- You should not sign up for a longer repayment period, unless you have to. Remember the longer your repayment period, the more you ultimately pay on your loan. While you might really need a lower monthly payment now, or can think of a lot of things you could do with that extra cash each month, really think hard about how much you will be paying overall if you sign up for a longer repayment period and if it really is necessary for your current financial situation.
- Refinancing should be completely free. There is no need to pay origination fees or any other fee to refinance your student loans.
- If you choose a variable rate, make sure you know the maximum rate your lender could charge you. It might look good now but not so much in the future.
- The type of student loan(s) you have is extremely important. Keep reading to see why.
Student loans owned by the federal government
Pay close attention to the type of student loans you have. Federal Direct Loans have a lot of benefits and options that not all private loans or FFELP loans have. As an example, Federal Direct Loans have numerous repayment options, such as Income Based Repayment, that are available to you if you experience financial distress, and which will help you find a monthly payment that you can afford based upon your current income and circumstance. In addition, Federal Direct Loans have certain forgiveness programs and other special federal benefits. These repayment options, forgiveness programs and federal benefits are not available on most private student loans. What’s more, if you refinance a Federal Student Loan in to a private refinance loan, you will lose all of these benefits. It is important to fully understand what you are giving up and balance that against the savings you can achieve before you decide to refinance a Federal Direct Loan. If you are not sure what kind of loans you have, visit studentaid.gov to learn more.
Want more information? Want to see how much you can save with a Brazos Refinance Loan? Check out our refinance calculator. If you have any questions about refinancing your student loans, we’re here to help! Just ask!
Why Brazos? We are one of the best kept secrets in Texas! We’ve been helping students and parent finance their college education since 1975, and our companies together are the largest nonprofit student loan group in the country! Helping make college affordable has been our mission for over 40 years! Go to About Us to learn more.