Should You Refinance Your Student Loans?
Refinancing your student loans can save you thousands of dollars on interest payments. If your credit is good and you have a stable amount of income coming in, I think it makes perfect sense to consider refinancing your student loans for a lower rate. Let me explain why.
For example, Joe is paying $465 per month on his student loans at a 7% interest rate. Joe owes a total of $40,000 and plans to pay his loans off within 10 years.
With a 7% interest rate on a high balance, most of the payment goes towards interest in the beginning.
By the time Joe finishes repaying his student loans at 7%, the total amount of his payments that went towards interest would be $15,732 total.
Let’s say Joe had good credit and decided to refinance his student loans at 3% interest rate.
His payment is now $386 per month over 10 years, which is almost $80 cheaper per month. Not only Joe is saving money per month, he is now saving money in the long run because he’s paying less in interest payments. So his total amount of interest paid after 10 years would be $6,349.
Joe went from pay a total of $55,732 in his first loan at 7% interest to $46,349 at 3% interest. Joe saved $9,383 over 10 years just by refinancing. Imagine how much you would save if you had over $100k in student loans.
I partnered with a great website called LendEDU. LendEDU is a marketplace for student loans and student loan refinance. With one short submission, they allow users to compare up to 12 different private student loan lenders. LendEDU does NOT hurt your credit! They use a soft inquiry when they pull your credit score and other information to determine what type of interest rate you qualify for. This is awesome because if you were to apply for 12 student refinancing loans separately, each will put a hard inquiry on your credit. So LendEdu will not hurt your credit score and the application takes only 3 minutes to answer a series of questions to see if you qualify for a lower rate. If you want to save money by refinancing to a low-cost student loan check out my exclusive link LendEdu.com or click below.
Student Loan Calculator Bankrate.com