Student Loan Refinance Guide

An Alternative to Expensive Student Debt

Today, a record 44.2 million Americans have student loans.16 And in 2016, total student loan debt in the United States topped $1.4 trillion, almost three times the amount outstanding just a decade ago.17

The average student loan borrower has $30,10018 in student loan debt. Graduate students borrow an average $57,00019, and students receiving professional degrees such as law or medical borrow even more.

As many college graduates have realized, student loan debt can present a major obstacle to pursuing the dreams a college education promised to deliver in the first place.

There is good news. Refinancing your student loans can help. A recent study estimates as many as 8 million Americans could lower the interest rates on their student loans20. That’s almost one out of every five student loan borrowers!

What is Refinancing?

When you refinance a student loan, you will receive a new loan from Brazos. Brazos will then pay off the principal and accrued interest on your current student loan debt.

Why Refinance My Student Loans?

Refinancing Can Save You Money

Before You Refinance...

To determine if refinancing your student loan is right for you, there are a few things you’ll need to keep in mind as you explore your options.

  • How your credit score impacts your rate
  • Repayment options available on your current loans
  • Details of your existing loan or loans

How Your Credit Impacts Your Rate

Before you go shopping for a loan, it’s important to understand your credit profile. Brazos Refinance Loans are a private student loan and your rate will depend on your credit. For refinance loans, the better your credit, the lower the interest rate you will qualify for, reducing your payment and saving you interest. Understanding your credit history and rough FICO score can help you shop for refinance options more effectively.

Brazos strives to provide transparent pricing. Check out our Rates & Terms to see our loan options, rates, and terms.


What Repayment Options Are Available On Your Current Loans?

Brazos Refinance Loans begin repayment immediately and do not offer repayment options such as graduated repayment schedules or income sensitive repayment options. These options may be available to you through your current lender and will be lost if you refinance your existing loans. If you believe you may want to take advantage of these special repayment options, refinancing may not be right for you.

Also, forbearance and deferment options may be available with your existing loans that are not available with a refinance loan. If you plan on going back to school, for instance, your existing loans may allow you to defer payment on the loans until you are no longer enrolled in school, whereas a Brazos Refinance Loan will not have this deferment option.


Details of Your Current Student Loan or Loans

In order to make an informed decision about refinancing your student loans, you’ll need some information about your existing loans.

  • How much do you currently owe?
  • What is your current interest rate?
  • When is your expected payoff date?
  • What is the current payment on your loan or loans?

This information will be necessary in order to calculate and compare total interest and monthly payments on your existing loans to those of refinance loan alternatives. If you don’t have this information, check with your current loan servicer. You should be able to get this information by logging in to their payment website or by referencing a recent billing statement.

Once you have this information gathered, check out our Refinance Calculator to see how a Brazos Refinance Loan can help you meet your financial goals.


Lowering Your Interest Rate Can Mean Big Savings

The term “interest” refers to the price lenders charge to lend money. Generally, interest rates are quoted on an annual basis and represented as a percent. The annual rate is converted to a periodic rate, typically daily, and is multiplied by the amount of debt outstanding to calculate the amount of interest that accrues. Payments on your loan are generally applied first to interest that has accrued, and the remaining amount reduces the amount of principal you owe.

Variable vs. Fixed Rates

There are two main types of interest rates available: fixed rates and variable rates. Fixed rate loans have a set interest rate that does not change for the life of the loan. The rate of interest and your monthly payments will be the same throughout the life of the loan.

Because fixed rates increase risk for lenders, fixed interest rates tend to be slightly higher than comparable variable rate loans.

Variable rate loans have an interest rate that resets at certain intervals of time, typically monthly, quarterly, or annually. As rates change, the amount you pay each month will also change. Because the borrower assumes some of the risk of increasing interest rates, lenders tend to charge lower interest rates at the start of variable rate loans in comparison to fixed rate loans.


How Much Can You Save?

Take a look at the example below, which compares several different types of student loans with a Brazos Refinance Loan.

How much can you save? Use our Refinance Calculator to compare your current student loans with a Brazos Refinance Loan.

Pay Off Your Debt Sooner for Big Savings

Refinancing your student loan debt can also help you pay off your debt sooner, saving you a significant amount of interest.

“Term” refers to the amount of time you have to pay off your student loan. Many federal student loans begin with 10-year terms, though they may be paid back over longer periods if they have been consolidated or if they’re above certain amounts.

Longer term loans help reduce monthly payments by dividing the amount owed into a larger number of payments. But the longer the term, the more time interest accrues on the unpaid amount, meaning you’ll typically pay more over the life of the loan.

Additionally, lenders typically charge higher interest rates for longer term loans because of the increased risk to them.

Refinancing Can Help You Pay Off Debt Sooner

Because refinancing can lower the interest rate on your student loan debt, you may be able to afford a shorter loan term. By combining the lower rate with the shorter term, you can maximize the amount of savings you’ll realize through refinancing.

Shorter terms generally result in higher monthly payments, even when the interest rate is reduced, but will result in less interest paid over the life of the loan. The savings can be significant.


How Much Can You Save?

Take a look at the example below, which compares the total amount of interest paid for loans with different terms and interest rates.

How much can you save? Use our Refinance Calculator to compare your existing student loans to a Brazos Refinance Loan.

BRAZOS RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. Brazos loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Program restrictions, other terms, and conditions apply. All loans are subject to individual approval and adherence to eligibility requirements and underwriting guidelines. Not all borrowers receive the lowest rate. If approved, your actual rate will be within the range of rates listed in this website and will depend on a variety of factors, including whether your loan has a fixed or variable interest rate, the term of the loan and your credit score. Rates and Terms are subject to change at any time without notice. Brazos loans are originated by Brazos Education Lending Corporation.

None of the information contained in this website constitutes a recommendation, solicitation or offer by Brazos or Brazos Higher Education to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.

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