Last Updated on
Student loan refinancing is an important issue for a student to deal with and it should not be confused with Student Loan Consolidation.Loan experts agree that if the student loan refinancing is smartly acquired from one of the best student loan refinancing companies, then students can get loan at alower and reasonable rate.You can get student loan refinancing at a lower interest rate, if your credit score is strong and you do have the regular income. If you are not fulfilling these conditions, then using a co-signer is also helpful to get loan at a lower interest rate.A cosigner can be any trusted adult, who is willing to share the risk and financially qualified.Parents are the most common cosigners, followed by grandparents, aunts, uncles, siblings and cousins who can also help you out with your study loan.
What is Your Loan Refinancing Goal?
Now, the important question is how the student should choose the student loan refinancing company with the availability of so many such options? Experts say, it depends on the refinancing goal of a student. Refinancing goal for a student could be to save the most in interest or could be to reduce the monthly payment. These goals can be satisfied with the option of interest rate and the option of term length.
For example, if your refinancing goal is to save on interest, then you should go for the short term loan. Lenders can offer the term length extending from five years to twenty five years. For the above mentioned case, you should go for the shorter term loan depending on your affordability. This is because, in this case, the monthly payment will be increased. But the loan will be paid faster. Here, the total interest amount will be at the lower level and this way, it facilitates to save money. Here, you should choose the lender who does not impose the prepayment penalty. In the US, under the government’s 2008 Higher Education Opportunity Act, it states, “It shall be unlawful for any private educational lender to impose a fee or penalty on a borrower for early repayment or prepayment of any private education loan.”
For students in Australia, they can check the Australian Taxation Office portal for all details regarding your student loan. Your refinancing goal can be to reduce the monthly payment, based on your present situation. Such situation occurs when either you can’t afford the high monthly interest or you want to save and free up some cash to spend on some other items. For example, if the student who has the federal student loan, and is somehow unable to pay the current payment, then the student may consider to switch to an income driven repayment plan.Here,the monthly payment is capped at the certain percentage of the student’s income, while the term length can be extended.Such plans provide relaxation to the student on the amount of monthly payment, but, in totality it increases total interest amount over the term period.So, it is clear that with each one refinancing goal, the option has its own pros and cons.
Students from Australia can also look for courses from other Universities which are relatively inexpensive in terms of course fees or are situated in the suburbs, with a low cost of living. Some universities also offer lucrative part-time jobs for postgraduate or research students within the campus. Students can also save on course fees by making sure they get good grades in the first attempt. One can seriously focus on their assessments & prepare them on their own. If that sounds far-fetched, then students can get quality solutions prepared by academic research experts and professional essay writers based on their academic need.
How to choose the refinancing company?
Even with one refinancing goal, there can be different options for student loan refinancing companies. Next question is how to choose one out of many such options? For this, we need to know about some of the market leaders in the Student loan refinancing market in US. They are
1. SoFi – Social Finance
2. College Ave Student Loans
3. Citizens Bank
However, Australian government’s Higher Education Loan Program (HELP) provides interest-free loans to Australian University Students. However, not all international students are eligible under this criteria.
For a prospective student, making comparisons based on the interest rates among different lenders is a challenging task. Rates are basically dependent on the time span, available for repayment. For example, a longer term has a higher interest rate while a shorter term yields a lower rate. Apart from that, the rate is closely dependent on the financial health and credit rating of the borrower. So, it is required for borrowers to do the research properly. Here, research should include the important details of your loan. It helps to evaluate the loan refinancing. If you are looking out for study loan comparison in US, then you can check out IEFA’s Loan Comparison Tool&Compare Student Loans feature of InternationalStudentLoan.com.
Before getting the student loan refinancing, the students should be able answer a few questions themselves.
• What is the reason/ goal for refinancing?
• What are the Strengths and weaknesses of each lender?
• The credit rate one can expect to get after being associated with particular lender?
• What are the repayment terms of your study loan?
• What is the maximum amount of debt they will refinance?
• Does the new student loan have a variable or fixed interest rate?
Online Calculation Tools to the rescue
For this, students have to understand their goal for refinancing, as explained above. With some basic understanding of how a student loan works, one can also use a gamut of online tools as listed below to better understand their requirements & options.
• Generic Loan Refinance calculator
• Bank Rate’sStudent Loan Calculators
• Collge Board’sStudent Loan Calculator
Based on the above information, do get in touch with your Student Support Team of your University to check all possible options for refinancing your student loan. Never know, you might be eligible for a government scheme or some University financial aid policy. Act today and be in-charge of your student loan financing, as it’s never late to save a few bucks.