College Loan Refinancing – What Should You Look For?

Christina holds a MSW degree from the Simmons College, Boston. She has recently completed her studies and is frantically searching for a job. Her father works as a cashier with Tesco’s Boston branch whereas her mother is a homemaker. The family was not in a position to finance her education. Hence, Christina was forced to apply for college loans. She is now searching for a job so as to finance the repayment of her college loans.

The education costs in the US are soaring and an increasing number of American students are applying for college loans to finance their higher education. In fact, many students are seeking loans from multiple lenders so that they are able to pay their tuition fees as well as other college related expenses such as room and boarding, transportation, books, food and clothing etc.

Many students complain that borrowing from multiple lenders can prove to be a big headache. Take the case of Susan who was pursuing a degree in Mathematics from the Boston University. In addition to remembering all the mathematical formulae, she also had to remember the repayment dates as well as the amount and ensure that all the paperwork formalities were being completed properly. Naturally, Susan got fed up of the situation.

When Susan shared her situation with Jim, an employee of Citibank’s Boston branch, he advised her to refinance her college loan. Refinancing one’s college loan means applying for a new loan and using the new loan amount to repay all the existing loans. This helps the student to streamline his debt situation as well as ensure that he is not answerable to multiple lenders.

According to Walter, a student at the Boston Architectural Center, if you are thinking about refinancing your college loan, then you should preferably do it during the grace period. US laws state that a student has a time period of 6 months before he will have to start repaying his college loan. This period of six months, known as the grace period, begins from the date of graduation. If you happen to go in for college loan refinancing during the grace period, you are entitled to receive a discount of .60%.  Walter states that getting your college loan refinanced during the grace period can save you lots of dollars in terms of interest. The savings get magnified if you happen to borrow large amounts of loans.

James, a professor of Western music at The Boston Conservatory of Music Boston states that if one is interested in getting one’s college loans refinanced, one should carefully consider the nature of the loan. In the US, there are basically two kinds of college loans available to the students – the federal loans and the private loans. The government funds the federal loans and they carry a low interest rates and are flexible as far as repayments are concerned.  On the other hand, private loans generally carry a higher rate of interest. According to James, if you are going to get your college loan refinanced, then you cannot club your federal loans and private loans. You need to refinance them separately. Remember that there are many benefits associated with federal loans that you stand to lose if you refinance them along with the loans borrowed by you from private lenders.

When Naomi, a student of the University of Boston decided to go in for a college loan refinancing, she decided to shop around the Boston city area so as to get a good deal. According to her it is essential to visit the offices of various lenders so as to pick the best deal. Doing so can help one to save a few dollars and make the refinancing process all the more beneficial.

Tony, a sophomore student at the Urban College of Boston advises students interested in getting their college loans refinanced to pay a close attention to the incentives offered by the lenders. According to him, you should preferably opt for a lender of he is willing to reduce the interest rates if and when you fulfill the criteria laid down by him. Tony says that when it came to refinancing his college loan, he decided to find out a lender who was willing to offer a concession in the interest rate. He finally located a lender in Boston who was willing to offer a discount of 1% in the interest rate if Tony was able to pay the installments on the specified date for the next 24 consecutive months.

Experts state that many lenders give an incentive on the interest rate if the student makes the payment on time or if he or she chooses the auto debit facility. When it comes to college loan refinancing, you should opt for lenders who do offer such incentives; but at the same time you should be confident about meeting your obligations on time.

You should also remember that lenders are willing to refinance only the current loans. In other words, college loans that are in default are not considered for refinancing. Current loans refer to loans that are in the grace period or under a deferment and forbearance. According to Neil, who is associated with Citibank’s Boston branch, if you are unable to make payments due to any reason, then you should immediately ask the lender to provide you with hardship deferment, so that you do not face any problems when it comes to refinancing your college loans.

College loan refinancing is thus a good option that can prove beneficial to scores of students.

Find more articles tagged with: