“How do I refinance my student loans?”
This question is one that is commonly asked by many Americans who are experiencing the effects of the financial crunch. Most of them are in a quandary on how they can refinance their student loan payments. Some student loans start out well, but become a burden overtime. As a result, people are finding it hard to make payments on time. While there are some whose student loans have spiraled out of proportion because of the interest rates and fees keep piling up. So to answer the question of how to refinance student loans, we’re bringing you some simple tips in this article.
Do an Honest Assessment of your Financial Capacity
Before you go out shopping for institutions to refinance your student loan, you need to do an honest assessment of your current financial capacity. Get an inventory of your sources of income (or money-in activities) and also your expenses (or money-out activities). This way, you can get an idea if you’re in the black (cash positive) or in the red (cash negative). This assessment will help guide you in making decisions regarding how much you can afford.
Know your Credit Score
A good credit score will work to your advantage because lenders will give you better rates or better terms. Know your credit score by requesting a credit report. If you happen to have a low credit score, don’t go out shopping for a refinancing firm just yet. Wait a few months and do your best to improve your score. In the long run, you will save a lot in fees and interest when you have a higher credit rating.
Contact your Current Lender
Talk to your current provider and talk about your concerns. They can find ways to help you and may even offer to reduce your interest rate or lengthen your term (that’s if your credit rating is good).
Find an Institution to Refinance Your Loan
Go to your local banks and talk to their loan division officer. You will find that the smaller banks are making it easier for people to refinance their loans.There are also Credit Unions ready to assume your loan. These institutions act as a union so they are not privately run. Thus, they can offer lower interest rates to their lenders.
Check out the Department of Education’s Direct Loan Program’s Website
This program by the US government makes it easier for Americans to refinance their student loan with the help of the Department of Education and your school.Here’s a good news to government employees: The College Cost Reduction Access Act of 2007 has a forgiveness program whereby they discharge remaining debts of government employees who have been working for 10 years or more. You just have to make 120 payments under this program starting 2007 in order to qualify.
So get started on your journey to financial freedom. You can follow these tips so that you can find the best way for you to refinance your student loans.