College Loan Refinancing

If you're looking for a way to reduce the interest rate on your college loans, refinancing them can be the answer.  There are many benefits to refinancing college loans, from locking in lower interest rate to making a single loan payment.  Refinancing college loans is also known as consolidation, and if you have federal college loans, you can do it for free.  College loan refinancing can be done by anyone with college loans, federal or private, but federal college loans are the only ones that can be consolidated or refinanced for free.

Several college loan refinancing companies offer incentives to student to refinance.  You can generally knock off a little over half a percentage point if you refinance your college loans during the six month grace period immediately following graduation.  You can take another percentage point off after a preset number of payments are made on time and you can get another quarter of a point taken off by some companies if you refinance your college loans and sign up for direct deduction from your bank account. If you have more than one type of college loan, federal and private, you cannot refinance them together.  You'll have to refinance both types of loans separately, but many lenders will do them both for you, you'll have two separate payments, though.

If you're refinancing private college loans, be wary.  These loans are not eligible for the Federal Consolidation Loan, and are not covered by laws forbidding lenders to charge you fees for the service.  Federal college loans can be refinanced at no cost, but private college loans will carry a price.  Make sure you know what fees are associated with you college loan refinancing and don't believe all the hype.  Many companies out there will boast that they can do it fast and free of fees, but you need to find the fine print to learn about the hidden fees that these companies don't tell you about.

Gill Havram, from Boston, Massachusetts, found himself in need of refinancing his college loans.  He had both types of college loans, federal and private.  He found a local lender that allowed him to refinance all his college loans through a single lender.  He still has more than one loan payment, but they're far lower than they were and Gill is able to start saving some cash.

Refinancing your college loans can greatly benefit graduates.  It allows them access to lower interest rates, can let you turn your interest rate from an adjustable rate to a fixed rate and lets you save cash over the life of the refinance.

Find more articles tagged with: