Student loans refinancing could reduce the monthly payments for student’s loan. There are several issues that you must consider carefully before you take this route.
Before you start to outweigh the pros and cons of refinancing it may be an idea for you to have a sheet of paper, draw a line down the middle to make two columns. On the left column, we will man FOR and on the right column we will name AGAINST.
It seems like a simple thing to do, but this will have a powerful effect on your decision because it will help to clarify your thoughts and make it very easy for you to make a choice about which path to take. (You can also use this method to help you come to a successful decision for anything else you do through life).
Refinancing Points to Consider
1.It is easier to repay federal loans as opposed to student loans.
2. Federal loans and Student loans each have their own structure, so they can be quite different.
3. Student loan organizations work on the premise that ‘the greater your education then the greater your income will be’, hence the interest rate for student loans can usually be a bit higher.
4. Remember that the interest rates that are applied to your loans are not necessarily fixed and may change over the course of the loan.
5. Every loan company will have a slightly different lending criteria so it is a good idea to compare the small print for each, taking more notes as you go.
6. Refinancing two or more loans will most probably lead to a greatly reduced monthly repayment amount.
7. Selecting a lower rate of interest for your loan is preferable than having a longer payback term for the loan.
8. When you refinance take in to account that there may be more fees applicable as well as more documentation.
9. Some loan companies offer different types of incentives just for using their company, add these incentives to your list for consideration.
10. Interest rates can also be slightly lower if you were to refinance during any grace periods.
11. Make sure that you read every page of every document before you sign anything, you may come across a condition in the small print that might adversely affect you in the future.
In any case, as soon as you start your loan program it is always a good idea to look at other sources of income that may be available to you.
Of course, there are the normal avenues of obtaining a little extra money such as a part time job to assist you, but perhaps it is time to start thinking outside the box.
As Albert Einstein said “Insanity is doing the same thing over and over again and expecting different results”
So, as you are already starting to think outside the box as far as your education and finances are concerned, it might be an appropriate time to consider …