How to Refinance Private and Federal Loans: The Basics

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If you’re interested in consolidating your loans but aren’t sure what you can combine, a few that can be combined include supplemental loans for students, Perkins loans, state and private loans, federal loans, and Stafford loans. For a full list, visit elfi.com. If you’re considering consolidating your loans, do note that you can only replace your various loans with a private loan, including government loans, as we’ve just mentioned. You can’t combine a combination of private loans and government loans into a government-only loan.

Should you change your repayment plan or refinance?

Your payment plan is simply the amount you pay off your loan each month. You may want to increase your payment plan if you now have more money than you did, or else you want to pay the loan off faster. Conversely, you may want to decrease your payment plan if you don’t have as much money as you used to. Depending on what type of loan you have, you may be able to speak to your loan service provider and change your payment plan based on how much you’re earning or to pay off your loan faster or slower.To go into a little bit more information, here’s a lowdown on private loans, federal loans, and other loans.If you’re interested in refinancing your private loans, the main things you’re probably interested in are the interest rates and minimizing how much you’re going to have to pay, either monthly or over the whole term of the contract. As you’re moving from one private loan to another, the terms will most likely be similar, and you won’t be losing any added benefits that come from government and state loans. The main thing to work out is the maths of how much you want to pay each month, how low you can get the interest, and what you want to pay in total.

Federal loans

It’s a commonly held belief that you’re not able to refinance federal loans, but this is actually a myth. In fact, some of the most commonly refinanced loans are from the government. The reason for this is that often, the interest rates on private loans are better and result in better payment plans than federal loans. The reason why someone may choose to keep their government loan is that several benefits come with them that may justify the extra cost. An example of this is loan forgiveness, which can be used if you’re struggling to make a payment. A private loan will rarely have such a scheme in place. There are some things to think about when thinking about refinancing your student loans.The main thing to consider is whether you’re actually going to save money and if the savings are worth refinancing for. The loan interest rates and the loan terms are the two main things that are important here. If you can get even a slightly lower interest rate than what you’re on currently, then it’s probably worth refinancing when you have a decent amount of loan still left to pay.

Courtney P.

I’m a 20-something stay-at-home mother and wife. I have an amazing husband, a beautiful daughter, two loving dogs, and a lazy cat. I wouldn’t change my life for anything! I love to read, listen to music, cook and blog!

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