(IntegrityPress.org) – More than 43 million people owe outstanding student loans. The average liability, as of 2021, was nearly $37,700, and most still owed at least $20,000 twenty years after entering school. People carrying student loan burdens might want to consider whether refinancing might be worthwhile and under what circumstances.
— Susannah Snider, CFP® (@SusSnider) June 18, 2015
If you have a number of different student loan providers, you can use refinancing to bring all the money you owe into a single loan. A service provider will buy your debts from other lenders and send you a single monthly bill to pay.
This strategy can make life a lot easier when it comes to making payments. Also, depending on the deal you negotiate, you may pay less interest by working with a single refinanced loan. Even a small change in your interest rate could add up to thousands of dollars over the lifetime of your debt.
There is a downside. If you avail yourself of refinancing, you’ll never be eligible for debt forgiveness or government-sponsored and income-driven repayment plans should they become available to others in your situation.
Still, the option can be helpful if used wisely. In a recent post for Insider, author Leo Aquino revealed how he saved money through refinancing, released his mother as a cosigner on his previous loan, and shortened the overall repayment period – all worthwhile benefits!
Copyright 2022, IntegrityPress.org