Student Loan Refinance: 5 Tips to Get Better Deals
student loan refinance
Misinformation about student loan refinance can lead one to more problems. These misinformation have caused money and time to unaware victims.
To avoid such bad incident, it is a must that a student who wants to avail student loan refinance takes time to sort out the facts from pseudo-facts or fictions. The following student refinance facts can help you in your student loan refinancing:
- Refinance Early. Although a six month “grace period” after leaving school is given where monthly student loans are not required to be paid, if the borrower intends to avail of the student loan refinance program during the grace period rather than wait until the loans are in repayment status, then he/she must do so. This is to have him/her save up to .60% and shorten the loan payment period by months or even years.
2. Ask about Lender Incentives. In making comparison for the best student loan refinance rates, inquire about special lender incentives and other discounts such as on one-time payments and automatic payments. Each can reduce the interest rate by .25 points to 1 full point.
3. Reconsolidation / Elimination. Once a borrower decided on a certain student loan refinance, he / she is already “stuck”. This is because borrowers can only add additional outstanding loans. He/ she can’t repeatedly refinance student loans unlike before July 1st, 2006 where borrowers can refinance as often as desired to take advantage of the dropping interest rate. Therefore he/she must shop carefully to obtain the best possible rate during the first time of loan availment.
4. Stay Up-To-Date. When applying to a student loan refinance, one cannot be in default. Payments therefore must be kept up to date. This will also enable one to obtain the best refinance rate available.
5. The student may need to choose two. In the case where a student has both private and federal student loans, he/she must seek separate loan consolidation programs. The borrower must review the requirements and benefits of each program to be sure that it provides the best course of action prior to making decision. One must always think that unlike the previous years, it is not that easy to avail the student loan refinance on repeated basis since once one makes a final selection, he/she will need to live with it for ten years or even more.