Should you refinance your student loans? When does it make sense to combine both federal and private loans into one new loan? The average college graduate owes $40,000 in student loans with interest rates averaging from 5% to 10% and the payback period ranges from 10 to 30 years. That’s an enormous debt burden!
One way to lower your average monthly payment, your interest, and your pay off time is to refinance all the different loans you have into one new private loan. Instead of making multiple loan payments each month you’ll have just one monthly payment to make. You will typically pay between 3% to 5% interest on the new combined loan. You can pick the repayment period that works best for your budget, usually between 5 and 20 years.
The company that Jordan recommends for refinancing is Splash Financial. Jordan is an affiliate of Splash Financial. You can connect with Splash Financial at 800-349-3938 or on the web at www.splashfinancial.com/moneyanswers.
Splash Financial negotiates with several banks and credit unions to give you the lowest possible rates. You can check the rate you qualify for online in just a few minutes and checking does not impact your credit score. Splash does not charge an origination or early repayment fees. Splash can refinance any private or public loans as well as Parents Plus loans. If you refinance $30,000 or more you get a $300 bonus if you mention Money Answers when you apply at Splash.
The one potential downside of refinancing federal loans is that you may lose special benefits included with federal loans, such as income driven repayment plans and loan forgiveness options for death, public service and permanent disability.
If you’ve acquired a huge student loan debt with higher interest rates it certainly makes sense to look into refinancing all your different student loans into one new combined loan with lower rates.
As a personal finance expert, Jordan recognizes quality solutions, forming affiliate relationships to help improve people’s financial lives.