Refinance Student Loans

There is no way around it.You took out student education loans to pay for college, and now you will have to pay them back. Of course, that may be very difficult for you to do though, regardless of whether you’re still in school, attempting to get started with your life after graduation, or even a few years down the road.

But the fact remains: You borrowed the money, you used it, and now you are obligated to repay it.

Refinance Your Student Loans

Thankfully, there is a way to solve the dilemma of repaying your loan obligations by refinancing all of your loans into one consolidated loan.  You still have to pay back what you borrowed, but with a student loan debt consolidation, you can make monthly payments to just one lender instead of several.

When you refinance your loans, the money you borrow from one lender pays off the money you owe to all those other lenders. The interest rate on a refinanced student loan is the weighted average of all the other loans, reducing it to a lower rate overall, and bringing your monthly payment down accordingly. Student consolidation loans are often settled at a fixed rate, which means you will not have to worry when July 1 rolls around every year that the payment will likely go up.

Four Plans

Of the student loan debt consolidation plans available, there are four distinctive student repayment programs to research.  One or more of these are likely to be just what you are searching for.

Standard Repayment Plan

If the thought of a fixed rate really appeals to you, consider either the Standard Repayment Plan or the Extended Repayment Plan. The Standard Repayment Plan provides you with a maximum of 10 years to pay back, but payments are divided within the time limit at a fixed rate of interest. 

Extended Repayment Plan

Extended Repayment Plans reduce the burden of monthly payment amounts even more by extending the time for repayment of the loan from between 12 and 30 years, based on the total amount borrowed. Again, the interest rate will be fixed for that period, resulting in lower payments. Remember that over time, you are likely to end up having to pay a larger amount, although the monthly repayments will be smaller and less painful make.

The Graduated Repayment Plan

The Graduated Repayment Plan also lets you stretch your monthly student debt consolidation payments over a period of time between 12 and 30 years.  With this type of plan, the amount of your monthly payment will increase every two years.

Income Contingent Repayment Plan

The fourth plan appeals to many people because it takes into account what is taking place in their life at the current time.  In the Income Contingent Repayment Plan, an affordable monthly repayment amount is determined based upon your yearly gross income, family size, as well as the total loan debt.  Another advantage of this type of repayment plan is that it spreads the repayments over a length of 25 years.

Consider Carefully

If you are close to repaying your student loans—perhaps within a few months or a couple of years— you need to carefully consider whether taking on a new loan is worth the time and effort.  However, should you still have many payments ahead of you – and you have already exhausted the deferment and forbearance options on your existing loans – consolidating your student loan debt will probably be to your benefit.