College debt is a burden for young people looking to achieve financial milestones, such as saving for a down payment on housing or investing in retirement. Fortunately, college graduates can pay off student loans faster and save money on interest so they can meet those personal financial goals.
Given the record low interest rates on student loans, now is a good time to refinance your private student loans… For example, a borrower with $ 40,000 in student loan debt who refinances a new 10-year fixed-rate loan by lowering his interest rate from 5.57% to 3.57% could save more than $ 4,600 over the life of his loans.
Use Student loan repayment calculator Credible to find out how much you can save on private student loans with a lower interest rate. And if you decide that refinancing is right for you, compare rates from multiple student loan companies directly on the Credible student loan market.
How to Refinance Student Loans at Record Low Rates
If you have been thinking about refinancing your private student loans, now is the best time to do so. Student loan refinancing rates fell to record lows during the week of June 7, 2021. Borrowers with a credit rating of at least 720 refinancing student loans with Credible saw the following interest rates:
- 3.57% for 10-year fixed rate loans, which the is in line with the all-time low set in the week of May 17, 2021.
- 2.92% for 5-year floating rate loans. This is below 2.96% last week and is the lowest rate on these loans for the entire 2021.
With this in mind, it is important to note the risks associated with refinancing federal student loans at this time, as it will result in the loss of federal remedies such as income-based repayment plans, COVID-19 abandonment, and potential future student loan forgiveness. … But since private student loans do not have such protection, it is not difficult to refinance the debts of private colleges. Here’s how you can refinance your private student loans:
- Check rates with multiple student loan lenders
- Choose the best deal based on interest rates and other factors
- Formally apply for a new student loan
1. Check the student loan refinancing rates with several lenders.
Just like choosing the best price for a new car or kitchen appliance, you should compare prices with several private student loan lenders to ensure that you are getting the lowest interest rate possible for your situation.
You can visit an online loan marketplace such as Credible to pre-qualify through multiple student loan lenders by filling out a single form. This will not affect your credit.
2. Choose an offer that will help you achieve your financial goals.
Borrowers with good credit history can get several student loan refinancing offers from different lenders. While some offers can help you lower your monthly payments, others can save you more money over the life of the loan. When comparing offers, consider the following factors:
- Interest rate. Since there is no commission charged for refinancing student loans, the interest rate is the most important factor when measuring refinancing cost… You want your interest rate to be lower than the one you are paying now.
- Loan term. A shorter loan term will lead to higher monthly payments, but they will cost you less interest over time.
- Monthly payments. Make sure you can afford the new monthly student loan payments before taking out a new loan.
You can use Credible Student Loan Refinancing Calculator to see how much you can save over the life of your new loan.
3. Submit a formal application and receive funding.
After you have chosen a loan offer, you will submit a formal loan application. At this point, you may need to perform a tough credit check and provide the following details:
- ID confirmation
- Proof of income
- Current student loan statements
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