When Should You Refinance Your Student Loans?

If you used student loans to pay for college or graduate school, you likely have many years of repayment ahead of you that might hinder your pursuit of other major goals.

And although some federal student loans might be forgivable, not everyone is eligible for loan forgiveness. For many borrowers, choosing to refinance student loans can be a great option to provide various types of assistance during repayment.

Refinancing student loans isn’t always the best way to lower your payments or give yourself some relief from your debt. Take a look at these eight situations when a student loan refinance makes sense.

You have private student loans

Private student loan debt is a cause of many borrowers’ decision to refinance their loans. Since private student loans usually aren’t eligible for loan forgiveness programs, refinancing there isn’t a downside to refinancing a private student loan.

You need more cash in the short term

If you find it hard to pay the minimum monthly amount that’s due on your student loans, you might need a lower monthly payment. Refinancing is one way to lower your monthly loan payments, leaving you more wiggle room in your budget and reducing stress.

Your credit score improved

It’s a great sign if your credit score has gone up since you first took out your student loan. The great thing about raising your credit score is that you might be eligible for a significantly lower interest rate on loans.

There aren’t typically fees involved when you refinance your student loans. Unlike a home mortgage refinance that often costs homeowners thousands of dollars, refinancing student loans with most lenders is free.

Savings outweigh the cost of refinancing

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