Benefits of Private Student Loan Refinance

Benefits of Private Student Loan RefinanceOver the last decade, America’s student loan debt has soared an astounding 400%. Today, $1.2 trillion in student loan debt hangs above our heads.

Student loans can be an expensive problem too. While federal student loans have relatively low interest rates, private student loans can be quite expensive. Unlike federal student loans, private student loans are issued by private lending institutions who qualify applicants based on credit worthiness.

About 10% of total outstanding student loan debt is private. Private student loan interest rates can range from 5 percent at the low end, all the way up to 14% on the very high end.

If you are stuck paying high amounts of interest on private student loans, you should know that there are options out there for you. Private student loan forgiveness is not an option for most people. Don’t believe those late night television ads talking about private student loan forgiveness. But private student loan refinancing is a possibility for many student loan borrowers. As it sounds, private student loan refinancing is the process of refinancing private student loans into one new loan with a private student loan lender. Refinancing is a great option for borrowers looking to lower their interest rate. Borrowers can even tailor their monthly payment to their financial situation. Refinancing interest rates start at about 2.00% on the low end, and range up to 8% on the high end. Only very qualified borrowers will be able to lock in at 2.00%. Whereas, most refinancing applicants are offered rates around 5%. Every basis point matters when it comes to student loans. Even saving 1% on a student loan is significant. Over the course of 10 or 15 years, 1% can add up to thousands of dollars.

Student loan refinancing lenders allow borrowers to refinance and consolidate both federal and private student loans. The borrower usually has the option of selecting a new term length as well. If you select a shorter term length, the interest rate you pay will usually be much lower. However, if you select a longer term length, such as 25 years, you will find yourself paying a relatively higher interest rate. Most student loan refinance lenders offer term lengths from 5 to 25 years. Borrowers also have the option of choosing a new interest rate type. Borrowers can select from fixed, variable, and even mixed interest rates.

Refinancing variable private student loans into a fixed rate can be a great idea. When interest rates rise, variable rates will rise too! Locking into a fixed rate loan can be a useful option and will provide protection in a higher interest rate environment. Fixed rates mean stable monthly payments and total loan costs.

One organization looking to help private student loan borrowers is called LendEDU is a marketplace for student loans and student loan refinancing. In 5 short minutes, you can compare up to 9 student loan refinance lenders with one application. All you need to do is fill out a short application that does not affect your credit. From there, LendEDU matches you to top student loan lenders such as SoFi, DRB, and LendKey. You will be able to view quotes from all the top student loan lenders without damaging your credit. Furthermore, you will know that you are getting the lowest rates from the start.

Too many consumers don’t price compare when it comes to student loans and student loan refinancing. Private student loan refinancing can be a great option for borrowers. But make sure that you compare lender offers before locking yourself into a new rate with a new lender. Lastly, make sure that you look for special deals from the lenders. Some lenders are offering borrowers cool deals such as 1.50% cashback and even cosigner release. You can find all these deals at LendEDU! And if you are lucky enough to get approved for multiple offers, you can even give your negotiation skills a shot. We had a couple readers who were able to negotiate their offers down after multiple approvals.

Definately look at refinancing those private student loans if you have them. These days there are about 10 lenders looking for your business. If you refinance with a particular lender, please shoot us an email with your feedback. We would love to hear from you so that we can make even better recommendations going forward.

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