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Written on
Tuesday, May 24, 2016

Be cautious about refinancing student loan debt

Written on
May 24, 2016

Be cautious about refinancing student loan debt

Whether you have just starting repaying your student loans or have been paying for years, here are some important things to consider about your student loan debt:

Make sure you know who you owe and when. Likewise, make sure each of your lenders has your current contact information to prevent missed bills and notices. Allowing a lender to automatically withdraw payments might help; some lenders even slightly reduce the interest rate because they don’t have to worry about the payment failing to arrive on time.

Look into all available repayment options. Some federal loans will let you set your payments based on your monthly income. Other repayment options may be available to you such as loan modification or reduced interest rates. Take the time to fully research what options are already available.

If you are thinking of refinancing your student loans, take the time to fully understand what this means to you and your loans. For example, if you refinance a federal loan to a private loan, you could lose some of your current and future benefits built into your federal loan package.

Be careful when you are given options to restructure or repay your student loans from phone calls or post cards you seem to randomly receive. Some of these companies simply take advantage of your desperation. Often their “helpful” options include costs upfront as well as your monthly payments. Be wise and take the time to research any potential restructuring of your student loan debt.

Don’t forget that any changes you make to lengthen the term of the loan means a longer time before your loan is paid off and it also means you’ll pay more interest. The most important things to remember are to consistently make your payments and reach out to your lender if you are having problems making payments. Eventually, your student loan debt will be paid in full!

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