, you might think twice before refinancing. The process is permanent and irreversible, so once you lose access to those benefits, you can’t get them back.
However, refinancing private loans generally carries less risk and could potentially lower your interest rate or monthly payment. You can use an online tool like Credible’s website to compare options from different private lenders and determine what kind of student loan refinance rates you may qualify for.Interest and payments on federal student loans have been suspended since 2020 to provide relief from the economic impacts of the COVID-19 pandemic.
The interest rate that you qualify for depends on factors like your credit score, the type of loan you’re seeking, and the loan’s repayment term. Good credit can help you lock in a lower rate, though rates tend to be higher on loans with fixed interest and longer repayment terms. You can request rates from multiple lenders to compare your options, as each lender has its own method of evaluating borrowers. Then, see how much you might save by estimating your monthly payment after refinancing. , or you can improve your credit before applying.
If approved, you’ll sign the final paperwork. Once you’ve completed your part, the refinance lender will work directly with your old lenders to pay off your loans. Continue making your regular payments until your refinance is complete. When you get the go-ahead, you can begin making payments to the new lender.When comparing different refinancing lenders, it can be difficult to keep all the details straight. Consider creating a spreadsheet or other document where you can track the specifics.