How To Refinance Your Private Student Loans

So many of us turn to private student loans to finance our graduate and undergraduate education. It's how many of us survived through those humbling college years. But when school is over, we are faced with the enormous tab that we racked up over the years. This can be overwhelming for a new graduate just starting out on his/her own. The refinancing and consolidation of your private student loans may alleviate some of the stress.

Making The Decision to Refinance Your Private Student Loans

In deciding whether or not you should refinance your student loans, it's important to weigh the benefits. One advantage of refinancing your private student loans is that if you have many loans, you can consolidate them all into one monthly payment. That way, you don't have to worry about keeping track of multiple due dates. Another advantage of making the decision to refinance your private student loans is that you can save money by securing a lower interest rate. When you initially took out your education loans, your interest rate may have been higher because of the market at that time or because of your credit rating (or lack thereof). Well, now things have most likely changed for the better. Taking advantage of lower interest rates now can save you thousands of dollars over the life of the loan.

Student Loan Eligibility for Refinance

No lender is going to give you the time of day if your student loans are in default status. Your loan MUST be current, with no outstanding payments due. Loans that are in deferment, forbearance, or in a grace period are all considered to be in an acceptable status. If you are paying on your loans and are not behind, you definitely have the thumbs up to apply for refinancing. It's also important to note that federal and private student loans cannot be refinanced or consolidated together. If you have both types of loans, you'll need to refinance them separately.

Getting Started

To get started, you need to first assess whether or not your loan is in an approved status. Check your credit report and call your current lenders to verify this. Once you've determined that you are eligible to refinance your private student loans, begin doing research online to find private student loan consolidation programs and lenders. Check with the major financial institutions, such as Chase, Wells Fargo, and Citibank. You may also stumble upon smaller lenders that are equally able to provide the same sort of quality service. Be sure to only settle with a lender that has a good reputation, which is verifiable through the Better Business Bureau.