Student loans are a huge financial burden for many students. In fact, one in three Americans has an outstanding student loan balance. And while the average rate on student loans has fallen over the past few years, it’s still high, and if you’re looking to refinance your loans, you may be stuck with a higher interest rate than you’d like.
But what if there was a way to reduce that cost? What if you could take out a new loan at a lower interest rate and payback less money?
Well, there is! And it’s called refinancing your student loans.
Tips for the lowest student loan refinance rates
Student loan refinancing can be an exciting prospect, but it’s important to know what you’re getting into before you take the plunge.
The best student loan refinances deals are available from lenders that specialize in this market. Find a good one and you’ll save hundreds of dollars on your monthly payments, and thousands of dollars over the life of your loan.
Here are some things to look for:
1) The lender must be licensed by the U.S. Department of Education or a state agency responsible for licensing private educational loans (such as the New York Student Loan Agency).
2) The interest rate must be fixed at least for a period of five years, which means it won’t change during that time period (for example, if a student loan refinance deal has an interest rate of 6%, then it won’t raise or lower the interest rate during that time period).
3) The loan amount cannot exceed what was originally borrowed, so if someone took out a $10,000 student loan, they can’t borrow more than $10,000 in refinanced money (and vice versa).
4) The borrower must be in good standing with their current lender and not delinquent on their payments.
5) The borrower must have at least a 580 credit score (or a 620+ FICO score).
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