Refinance A Student Loan

To refinance a student loan or not really depends on what the benefit is for the graduating student in terms of interest and repayment schedules. Options included in an offer include low interest rates, longer repayment terms, and forbearance, or deferment options. Government backed student loans offer the best benefit to most students and usually the lowest interest rate. However, in order to receive these wonderful benefits some sort of consolidation must be done. In essence to refinance means to consolidate.

The old loans from individual lenders are paid in full, while a new combined loan is brought forth. These new loans can extend payments up to 25 years post graduation or withdrawal from school. If a student is planning to refinance a student loan, there are some issues that must be in order to qualify. The first issue begins in school attendance. If the student is still in school, they may have to wait until they graduate or withdrawal and their grace period ends. For those that have been out of school and have been making regular payments on one or more loans, this option may be a great benefit.

It is important to note that while financing is in process, it is necessary to continue to make payments on the old agreement. This will ensure no discrepancies and unintentional bad marks on a credit report. Graduating students are just beginning their independent lives. Starting out with bad credit makes life a lot harder than it has to be. Once the loan is processed and a new payment voucher book is issued, the student can begin making payments to the new loan. Typically when someone wants to refinance a student loan, a large benefit is that of new deferment periods. If a student has previously used up their deferment or forbearance options, a new loan can allow them those options again. It is important to have a budget and to understand personal spending limits even on debts owed. John 10:10 offers encouragement by saying "The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have it more abundantly." Money and debt should not run anyone's life, God should. Make sure He is the base of any financial plan.

To refinance a student loan effectively, detailed information about each lender and the balances held need to be provided. If this information is not easily obtainable due to the fact that loan companies sell loans to other companies daily, there are some lenders that will do the research for you. The applicant is responsible for the outcome, and if any legitimate loans were not included in the new loan, they will have to be paid off separately. Accurate record keeping in the college years is of utmost importance later in life. Once a person has completed the process, they can sit back, relax, and enjoy the extra money they saved.

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