Student loan borrowers can potentially save $ 5,000 refinancing as interest rates hit record highs
Student loan debt is a heavy burden on the finances of millions of Americans, making it difficult for borrowers to save money to buy a home or raise a family. Fortunately, it may be possible to ease the burden of college debt by refinancing yourself at a lower rate.
Refinancing your student loans can help you lower your monthly payments, get out of debt faster, and save thousands of dollars in interest over time. And with student loan refinancing rates near historic lows, borrowers can save more money than ever before.
DO I NEED TO REFINANCE MY FEDERAL STUDENT LOANS?
Student loan refinancing rates set a new record for the week of November 22, reaching an average fixed interest rate of 3.35% for the term of the 10-year loan and a variable interest rate of 2, 41% for the duration of 5 years. Although rates have risen slightly since, there has never been a better time to refinance student debt.
Read on to learn more about student loan refinancing, including how to calculate your potential savings. You can browse current refinance rates from real private lenders in the table below.
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A student loan calculator can show you potential savings
Refinancing student loan debt at a lower rate is a proven way to save money, and your potential savings can be determined in a few simple steps using the Student Loan Refinance Calculator. by Credible. You will need to provide the following:
- Your current loan repayment terms. You will need to know your loan balance, the interest rate and monthly payments, as well as the number of student loan payments you have left.
- Your new interest rate. View your free estimated student loan refinance rate without impacting your credit score by prequalifying on Credible.
- Your new loan conditions. If your goal is to lock in a lower monthly payment, choose a longer term loan. If your goal is to pay off your student debt faster, choose a shorter loan repayment period.
WHAT TO DO IF YOUR STUDENT LOAN DEPARTMENT CLOSES
You can practice with the following example: The average student loan balance in the United States is $ 37,693, according to the Education Data Initiative, with borrowers paying an interest rate of 5.8% on average . By refinancing to a 10-year loan term with a fixed rate of 3.40%, the average borrower has the potential to reduce their monthly payments by about $ 50 and save almost $ 5,250 over the life of the loan. .
Visit Credible to see refinancing offers tailored to your needs, so you can calculate your new monthly payments and lifelong savings.
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How to refinance student debt in 5 steps
Refinancing a student loan is a straightforward process that can be done entirely online. Here’s how to refinance a student loan in just a few steps:
- Check your credit score. Private lenders determine your interest rate in part based on your credit history, which means borrowers with good credit will qualify for low rates. You can request a free copy of your credit report from the three credit bureaus (Equifax, Experian, and TransUnion).
- Review your existing loan terms. You will need to know your current loan amount to determine how much you should borrow. You should also check your current student loan rate, so that you can find a new loan with a lower interest rate.
- Compare the rates of several lenders. Most private lenders allow you to view your estimated interest rate and the terms of your loan without affecting your credit score, so you can search for the lowest possible rate for your situation.
- Formally apply for the loan. Once you have chosen the best repayment plan for your needs, you will need to complete an application with the lender. You will need to provide information to confirm your identity and income, such as a W-2 and a driver’s license.
- Continue to make payments while your loan is disbursed. The refinancing lender will pay off your current student loans within weeks. In the meantime, it’s important to keep making payments on time to avoid penalty interest and additional charges.
You can start the application process by filling out just one form on Credible. This allows you to compare repayment options between lenders online, so that you can rest assured that you are getting the lowest student loan refinance rate for your financial situation.
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