Student Loan Refinancing
The amount you owe in student loans can have long-term impacts on your overall financial well-being. That’s why managing your student loan repayment plan is critically important. When managed well, you could potentially save thousands of dollars over the life of your loan.
Is student loan refinancing right for you?
Refinancing means you replace your current loan(s), potentially at a lower interest rate. Lenders “buy-out” your loan(s) from your existing loan services — both private and federal — and issue you a new loan equal to your outstanding student loan balance(s).
Consider refinancing your student loan(s) if you:
- have high interest rates
- have high monthly payments
- want to shorten, or lengthen, the term of the loan
- want to switch from a variable rate to a fixed rate (or vice versa)
- are a loan co-signer or borrower for someone else
Refinancing your student loans can mean potentially paying less over time with lower monthly payments and/or lower interest rates. Keep in mind, however, when you refinance your student loans, you may be trading in your federal loan for a private loan.
Refinancing your student loan comes with pros and cons. Make sure that it’s right for you:
PROS
- Single loan servicer
- Potentially lower interest rate
- Single payment
- Can include both private and federal loans
- More terms‐of‐loan options
CONS
- No federal repayment options
- Limited deferment or forbearance opportunities 1
- No loan forgiveness opportunity
- Must qualify financially
Explore your options
There’s no guarantee that any lender will offer you better terms on your student loans than you have now, but it’s worth looking at refinancing simply because of the savings potential.
Check the background of our investment professionals on FINRA's BrokerCheck
