You too can save on student loans with refinancing because it comes with a promise of giving you a new loan whose monthly payment is lower. But first, you need the best student loans refinancing options. Some also come with the offer to consolidate your loans which ensures that while you have only one debt to deal with at the end of the month, you are spending less to cover it. As a result, more funds can be saved to redeem the principal balance.
Why Should You Refinance Your Student Loans
As earlier stated, there are several perks to refinancing a student loan and that is why we’ll like to place more emphasis on it. Therefore, take a quick look at some of the reasons why you should refinance your student private loans.
1. To Get Better Interest Rates on Student Loans:
Unarguably, better interest rates can be gotten through refinancing which allows you to invest the other part of what has been withheld from paying the usual interest. You can also use the saved part to get materials for your studies or begin to save to pay the principal. Moreover, if you are a high-income earner with a good credit score, you can get even lower interest rates from private lenders. This and many more makes financing another option to financing tour loan even before your stipulated time.
2. To Manage Debts Easily and Effectively:
Another potential benefit you stand to gain through refinancing of Federal student loans is the ease in managing your debts effectively. In this case, if you have more than one, then they can be consolidated into one which means at the end of the month, you only have to pay interest on one loan. Now compare that to having to struggle to calculate and manage individual ones.
3. Extend Loan Term:
The repayment date of your current loan is drawing near and you know you have not saved up enough money to pay it. You’ve not also been paying a significant part of the principal on a monthly basis and this just creates a web of problem. Nevertheless, a new loan that pays for the current one will create a new loan term aside from a different interest rate.
Best Student Loans Refinancing Options
Now that you know what you stand to gain through a refinance, you may be wondering which private lenders offer the best student refinancing options. Outlined below are some of the best out there and they have been determined based on their interest rates and loan term. They include:
- Laurel Road
- Common bond
1. SoFi : Interest rate 2.54% – 7.12%, Terms 5, 7, 10, 15, 20
SoFi, a U.S. based company offers student loan refinancing, medical/dental resident refinancing, parent PLUS Refinancing, among other options. It requires that a potential borrower must be a citizen of the U.S. or have a permanent residence in an eligible state. Among reputable loan websites on the net, SoFi has also received a high rating.
2. Earnest: Interest rate 2.54% – 7.27%, Terms 5 to 20
Earnest offers products such as refinancing student loans, parent PLUS refinancing, and personal loans. The San-Francisco based company also offers flexible payment plans to pay off debts. For instance, a user can adjust their payment debt with no fees levied. The latter is usually something worth considering since fees such as origination fee may be too high to consider such loans in the first place.
3. LendKey: Interest rate 2.67% – 8.96%, Terms 5, 7, 10, 15, 20
Federal and private loans can be consolidated thanks to the lending service provided by LendKey. Like the others, it also promises flexible payment options and helping you to save on your loans. The company also offers a variable rate and fixed rate student loans. Among the duo, a fixed rate may be a better option instead of paying low some months and high in other months.
4. Laurel Road: Interest rate 3.23% – 6.65%, Terms 5, 7, 10, 15, 20
Laurel Road claims to have $590 million in total customers’ savings and an auto pay discount. It also says there are no prepayment penalties and as such, this is one more way to go if you’re looking for one of the best private lenders out there. A prepayment penalty could be attracted by refinancing a loan too early, but of late, some companies have set it aside from their terms.
5. Common bond: Interest rate 2.69% – 7.43%, Terms 5, 7, 10, 15, 20
Commonbond comes with the option to merge both private and Federal loans if in any case, you have more than one of each. It has an auto pay option and payment protection. For its refinancing options, you can choose among three that have been provided by this U.S. based company.
You can save on your student loans with refinancing and it’ll take away some of the stress and worry on how to pay your loans. With a lower interest rate levied and ease of better managing debts, you can save up for rainy days instead of using a large chunk of your earnings to pay monthly interest. Now take the next step and give one of these private lenders a try and see which options best suit your needs.