Options for Student Loan Refinance Companies

Student loan refinance companies lend you money to pay off existing student loans, and then become your new student loan company. Refinancing student loans can allow you to lower your student loan interest rate or to lock in an already-low rate on a variable rate loan. Refinancing can lower your monthly payment to allow you to keep more of your paycheck, or can provide you with payment plans so your payments are easier to make. However, all student loan refinance companies have slightly different rules, terms and conditions so you need to understand your different options for student loan refinance companies.
Options for Student Loan Refinance Companies

There are two main types of student loan lenders: government lenders and private lenders.

    * Government lenders are those lenders who issue loans backed by the US government. The Department of Education is one example of a government student loan lender. Other companies may be privately held companies or for-profit companies but may have an affiliation with the government that renders them quasi-governmental companies who grant government backed loans but who aren't directly a part of the government.

    * Private lenders, on the other hand, issue private student loans that are not backed by the government. While these companies are still somewhat regulated by various student loan and lending laws, they are not affiliated with the government and thus may have looser requirements and regulations in regards to what interest can be charged, who can qualify for credit, and what the terms of their loans are.

Choosing the right student loan refinance companies depends a lot on your personal situation. Consider how much debt you have, and what types of loans you have. Government lenders, for example, will not allow you to refinance or consolidate private loans. Government lenders may have lower interest rates or more favorable repayment terms, but may only allow you to refinance Stafford Loans, Plus Loans, Teach grants and other government-issued or backed loans, so if you have private loans, this may not be an option.

It is also important to note that you can refinance and consolidate your existing loans with the same company who holds those loans. Student loan refinance companies are permitted to refinance to their own borrowers in order to alter or change the terms of the loan, and in some cases, this can save time in the refinance process and make refinancing your student loans easier.

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Student Loans Refinance

A student loans refinance can be a great way to make your loans more manageable, and hopefully get a lower interest rate.

When you first get financing for school you likely have little to no credit and are offered undesirable interest rates. After the years you spent in school, hopefully during that time having some employment and building credit, you are probably able to find lower interest rates. Your life before you went to college is probably also very different from your post school life. You have new employment, new living conditions, and new needs for your monthly payments.

A student loans refinance is where you finance again, you apply for a brand new loan and use that to pay of your original financing. People do this for many reasons, often to adjust their monthly payment amount and the length of time it will take to repay, but even if these are part of the plan, you should have a goal of finding a lower interest rate when looking for your new loan to save you money.
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If you have multiple loans, as many do, you of course have the option of finding new deals for each of them, but more commonly people find one new source of funding, and pay off all their old obligations with that. This way you have the added benefit of one monthly payment.

It is important to keep in mind that for private student loans, from a bank, credit union, or online lender, this is a great option. However, for any federal funding you may have you want to keep those separate. You certainly have the option to do whatever you would like, but government programs offer much lower interest rates and more flexibility than private options that you will want to take advantage of. If you have multiple federal loans you can contact them about consolidating to one monthly payment quite easily, but you'll want to keep that separate from your other payments.

This is really a straight forward process that should make the intimidating task of repaying these much simpler, and cheaper. A student loans refinance will help you make your monthly payments adjust to your post college life, instead of the other way around.

by Jennifer Quilter

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