Looking to refinance your student loans? Millions of college graduates around the country stayed with student loans that had annual percentage rates that were too high. When they signed up for these loans, they weren’t worried about paying them off because graduation seemed so far away. Now the time has finally come to start repayment. Fortunately there are few good ways to ease the sting of paying back your student loans.
What we are looking for when refinancing student loan is a lower APR, or annual percentage rate. The APR is a percentage of the total amount of money you borrowed that diminishes as payments are made towards the loan.
Another very important thing you must consider when refinancing your loans is the cost of refinancing itself. While there are a few lenders that won’t charge upfront fees, there are plenty that will. Stay away from lenders that want to charge this fee upfront because your monthly costs will be higher in the long run. If the lender offers to charge a small upfront fee that will save you money by lowering your monthly payment, you may consider it, but this will most likely cost you much more in the long term.
When looking to refinance, your first stop should be your bank. The bank in which your personal checking and savings accounts reside is an excellent place to start because you already have a financial history with that institution. Most banks will gladly take your requests into consideration by starting with a credit check and your personal history with the bank.
There are a number of other ways you can refinance your student loans, but keep your guard up at all times because some lenders, especially those that are not well recognized, will include pitfalls in their contracts such as early repayment penalties, exorbitant late fees, and large APR increases if you make a late payment. If you do decide to do business with these lenders read their contracts very carefully before signing anything. It’s also a smart choice to have an accountant or lawyer look at it as well to ensure you are entering a fair deal.
It is wise to pay back your loans on time, because they play a major role in establishing a solid credit history that affects a creditor’s decision on future loans for a home or vehicle. With good choices, student loan refinance can save you a lot of money.