When you graduate or leave school, your student loan will go into repayment and you will need to assess whether or not your loan is really the best deal out there.
Refinancing can save you money each month through lower payments, and save you money over the life of the loan through lower interest rates.
Consolidating student loans with different payment amounts, due dates, and interest rates into a new loan with one payment, one amount, and one interest rate can make it easier to stay on top of your student loan obligation without a payment getting lost in the shuffle.
Both refinancing and consolidations pay off all of your old loans and replace them with one new one – that’s why once you sign, the bell cannot be un-rung.
You should also know that if you convert federal loans to private in a refinance, you will lose the protections that come with federal loans, such as eligibility for income based repayment (IBR) and the ability to have outstanding balances forgiven after 25 years of regular payments.
Pluses of Student Loan Refinancing But for those that have a good job and are earning a healthy wage with a high likelihood of job security such that you don’t need these fallback measures, refinancing to get a lower interest rate is smart.