There are many graduates who are still servicing their student loans several years after completing university education. Loan repayment is always an expensive affair especially when interest rates are high. Many of those with student loans are looking for ways to minimize the expenses incurred in loan repayment. You should learn to refinance to save money on private student loans. This occurs when a private lending institution buys off your existing student loan and advances you a new credit facility at an interest rate that is much lower than your current loan pricing.

Refinancing facts

You can always save thousands of dollars and reduce your debt burden when you negotiate a good deal and get a good interest rate.

Qualification criteria

You need to have a good credit score; that is given because no lender wants to give money to a likely defaulter. You also need to have a source of income because this will determine your repayment ability. Having a degree from a recognized college or university is also mandatory. Conditions for refinancing differ from lender to lender and, therefore, it is important to shop around and find the most flexible one.

The best time to refinance

The best time to refinance your private student loan is when interest rates come down. It wouldn’t make sense to refinance a loan at a higher or similar interest rate as compared to the current pricing of your loan. Ensure that you get the lowest rate in the market to save more. You can always use online sources to compare how different lenders have priced their loans. It is also advisable that you seek to refinance when your student loan balance is still high because you wouldn’t save much when your loan repayment is almost complete. This is especially true for loans being serviced on a reducing balance basis because the interest paid reduces the principal balance.

Benefits of refinancing

Refinancing allows you to save a lot of money which would have gone towards interest repayment. It can also give you time to reorganize your finances by opting for a longer repayment period to reduce the monthly expense on loan repayment. Student loans are usually very burdening and can keep you in a financial rut for long periods when you are just starting out in employment. Refinancing can, therefore, give you the much-needed shot in the arm as far as your financial freedom goes.…