While refinancing your student loan can be a great strategy to manage your student loan debt, student loan refinancing can be confusing. Worse yet, it can lead to significant financial problems down the road if you don’t make the right decision.
What Should I Consider To Determine If Refinancing Your Student Loan Is Right For You?
- What Are The Terms Of My Current Federal Student Loan
You should get our your documents and determine how long your payment plan is, the amount of your payment, the amount of the interest rate and whether it’s variable or fixed, and how much interest you’ll pay over the life of your current repayment plan.
- Does the new student loan that you are looking at have a variable fixed interest rate?
You can convert the current variable interest rate to a fixed interest loan or vice versa. Fixed interest rates are less risky and should you consider a variable interest rate.
- What types of loans are you trying to consolidate?
You can’t consolidate Federal student loans into private student loans!
- What protections do you have within your refinanced student loan?
Protections of Federal student loans, including deferment or forbearance of income based repayment plans and forgiveness options are rarely seen in private student loans. These should be key in terms that you should consider when looking for refinancing. You want to understand what’s considered a default, whether you can defer or forebear payments if you are having financial problems, what your refinance options are at that point and what penalties you would pay, whether your loan is dischargeable as a result of disability or death and if there are any other forgiveness provisions.
Asking the right questions is key before you refinance your student loan.
Don’t make a mistake and destroy your financial future. Contact student loan attorney Nancy L. Cavey, who will help you understand your student loan refinancing options. Call today at 727-828-9955.