A student loan is a big financial commitment. When you’re applying for school, it’s common to take out loans to cover tuition, books, and other expenses. But when you graduate and start making monthly payments on your student loans, they can be even more expensive than expected. That’s where refinancing can help! Refinancing means taking out a new loan with lower interest rates and better terms than what you have now. It may seem like a risky move at first glance because of all the numbers involved, but if you do some research ahead of time and shop around for lenders who offer competitive rates—and don’t forget to compare long-term costs—you could save thousands by switching over to a new lender with better terms on your student loan debt.

Do some research ahead of time.

It’s important to do some research on your own before meeting with a lender. This will help you understand your options and decide if refinancing is right for you. Here are some things to consider:

• Find out how much you owe. You can request information from each of your student loan lenders by filling out this [request form](https://www.nslds.ed.gov/nslds_SA/ib_borrower/index) and mailing it in, or by requesting an online account at their website.
• Find out what your interest rate is, whether it’s fixed or variable, and when the rate resets (if applicable). You should also consider any fees associated with your loan if they’re not included in the monthly payment amount listed on the federal government’s National Student Loan Data System (NSLDS).
• See if you qualify for a lower interest rate by using a calculator like [Credible](https://credible2-secure-studentloanrefinancing-frontend-v1a6c5a6dcd7e4b8f80b4adbd33b1510?source=plskc), which tells students whether refinancing their loans would be financially beneficial based on their current situation and eligibility requirements as determined by FICO scores and other factors such as income levels achieved via tax returns filed over multiple years’ worth of data points collected during those periods’ corresponding tax seasons).

Gather and connect your financial documents before you apply.

To ensure you get the best deal possible, first be sure to gather your financial documents. You’ll need:

• Social security number, name and address
• Most recent tax return
• Most recent pay stubs (if applicable)

Once you’ve gathered all of these items and connected them to the right accounts, your lender will be able to make an accurate assessment of your situation. For more information on how to find a lender that fits your needs and budget, check out our guide for choosing a student loan servicer.

Shop around for the right lender.

When you’re shopping for a student loan refinance, there are several factors to consider:

• The variety of loans that the lender offers. Ideally, you should be able to find a lender who offers both Federal and private loans. In some cases, such as with Sallie Mae and Wells Fargo student loan refinancing options, you may also be offered a mix of fixed-rate and variable-rate loans.
• The interest rate. An important part of any refinance is getting an attractive interest rate on your new loan (which we’ll discuss in more detail below). Lenders with lower rates than your original creditor will make refinancing worth it even if they have higher fees or other disadvantages compared to other lenders.
• Other fees associated with the new loan (such as origination fees) can add up over time! You’ll want to look for lenders who offer low fees or no fees at all on their refinances if possible; otherwise, making payments could cost more than they would have originally due just those little things like being charged $200 each month instead of $150 because someone else did something stupid back when they were young enough not worry about things like money much yet but still understood how important getting good grades.

Related Post:Schools Offering Medical Billing and Coding Degree Online

Comparison shop long-term costs.

The first thing you should do when shopping for a student loan refinance is to compare the long-term costs of your options. The easiest way to do this is by comparing the total interest you will pay over time, as well as the annual percentage rate (APR).

• Total interest paid: This number represents how much money you’ll spend on interest during your repayment period. It’s found by taking your principal balance and multiplying that number by 1 minus your loan’s APR (1 – APR = total interest paid). For example, if your principal balance is $10,000 and you have a 6% fixed-rate loan with monthly payments of $200 per month for 20 years at an APR of 7%, then your total amount financed is $10,000 and thus the total amount due after 20 years would be: ($10,000 * 0.92) + ($7 * 10) = $11,410.76
• Annual percentage rate (APR): This figure tells you how much interest rates are going up or down every year—a lower number means less risk of being stuck with high monthly payments over time; a higher number means more risk but potentially lower monthly payments in some cases. An even better option than simply looking at these two figures separately would be to focus on comparing them directly against each other so that any differences between them can be accounted for when making comparisons between different options for refinancing loans with different terms or rates

Know your credit score before you apply.

Before you apply, it’s important to know how strong your credit is. Credit scores are a number that represents your creditworthiness and can be used by lenders to determine whether or not you’re likely to repay a loan. A good score is essential for getting approved for student loans, but there’s more than one type of credit score out there.

You can get your free annual report from Experian (the other two major bureaus—Equifax and TransUnion—will also provide this information). You should also be aware that some lenders may use a different scoring model than others do; they may require different minimum scores based on their risk tolerance.

Consider how long you’ll be repaying your student loans, and how long you’re willing to take out a new loan.

When you refinance your student loans, you will be taking out a new loan to pay off the old one. The length of this new loan is called its term—the number of years it will take to pay off the debt. For example, if you take out a $40,000 student loan at 4% APR and want to repay it over 10 years (120 months) instead of 20, you’d have monthly payments of $333 instead of $600 with the same total amount due at the end of the term.

The shorter your repayment period, the more interest you’ll pay for that month because there’s less time for compounding interest to work its magic on your balance. So if both loans have similar APRs and terms but only one has five years left before repayment begins while another has 15 years left before beginning payments, then whichever one gets started first will save money by getting done sooner than later; ultimately saving more money overall by paying off their debt faster!

You can save money by refinancing your student loan

Refinancing your student loan is a great way to save money on interest payments. The process is straightforward and the savings can be substantial, especially if you have multiple student loans to pay off.

There are many lenders offering refinancing services for borrowers with various types of loans—government-backed, private and even cosigner loans. Some lenders require borrowers to contribute some money toward their new loan while others don’t. In general, the longer it will take you to repay your current debt (the amortization period), the higher the interest rate you’ll need in order to get approved by a lender.

If you plan on paying off your current debt quickly or within five years—a typical length for a standard student loan repayment period—then shop around for those who offer lower rates with shorter amortization periods such as LendKey or Earnest (both have no origination fees). If you’re willing to put more time into repaying your debt then check out SoFi’s fixed terms which range from 3-15 years with rates as low as 2%.

What to avoid when refinancing student loan

Don’t prioritize a low rate over potential perks

While it may seem like an obvious step to compare rates before refinancing your student loans, there are other parts of the process that you should pay attention to as well.

When choosing a refinance lender, remember that not all lenders are created equal. Some offer features and perks that others do not—and these differences can make all the difference in how much money you actually save on interest over time. These include:

• Interest rate cap (maximum amount). A cap limits how much interest can accrue on your loan each month; if you have one and make payments on time, this could prevent your monthly payment from exceeding a certain amount (which could keep you from having to pay off other debts or taking out additional loans). This is especially helpful if interest rates rise during the life of your new loan. But be sure to read any fine print closely; some capping offers only apply during certain months or may have other restrictions that take away from their usefulness.
• Origination fee (down payment). Many lenders charge an origination fee when they issue a new loan—typically between 1% and 3% of its total amount—but there are programs out there that don’t require any upfront cost at all! A lower origination cost means more money stays in your pocket rather than going into someone else’s pockets—so always look for zero-fee options wherever possible!

Don’t be scared to shop around

You might be surprised to learn that you have options when it comes to refinancing your loans. There are dozens of companies out there offering student loan refinancing services, and each of them has a unique set of offerings. The key is to make sure you’re getting the best deal possible for your situation. Here are some things to keep in mind:

• Shop around! Just because one company offers you a lower interest rate doesn’t mean it’s the best option for you. It’s important that you do your research before signing up with any lender—don’t just sign up based on the first offer you get or because they offered some sort of exclusive deal (be wary).
• Make sure they’re legit! A lot of companies seem like they’re legitimate institutions when they actually aren’t regulated by any authority or agency whatsoever (like many payday lenders). This means they can charge whatever interest rates they want, which often ends up being extremely high compared with traditional lenders who have limits on how much money they can charge per month/year etcetera…

Don’t wait too long to refinance

You’ll pay more interest if you wait too long. If you have a student loan, don’t wait until the last minute to refinance it. The longer you hold onto your student loans and delay refinancing, the more interest they will accrue—and that means more money coming out of your pocket in the long run.

If rates go up while you’re waiting, consider refinancing early. If rates go up during this time period (which is likely), then your refinance may turn out to be even more expensive than it would have been otherwise because of what’s called “rate shock.” When that happens, some lenders will let borrowers lock in their rate before their loan begins with the new lender (and it won’t count against them). But most lenders won’t do this unless both parties agree to do so at the time when they first enter into an agreement with each other—so if one party changes their mind later on down the line about locking in a rate or not locking in a rate before signing off on paperwork after all? It’s too late!

Don’t miss your chance to get a sign-up bonus

The sign-up bonus is a one-time offer that you can use with any student loan refinancing or consolidation. The good news is that these offers are available for a limited time, so don’t miss your chance to get the money you deserve. Another benefit of refinancing student loans is that it might be possible to take advantage of a sign-up bonus without having any extra cash on hand (except for the monthly payments). However, if refinancing doesn’t work for you, there’s another option: Apply for an entirely new loan and make sure to include your current income information when applying.

Don’t ignore the fine print

When refinancing student loans, you’ll have to read the fine print. You don’t want to end up with a loan that doesn’t help you or even hurt your situation.

• Make sure you understand all the terms and conditions of your loan.
• If there are any student loan forgiveness programs that apply to your situation, make sure you know what they are and how they work.
• Find out what will happen with the interest rate after the initial period is over—and when those changes could happen.

Related Post:How Much Does a Scrub Nurse Make?

Consider all these things before refinancing your student loans.

• Don’t be afraid to shop around.
• Don’t wait too long to refinance.
• Don’t miss your chance to get a sign-up bonus!
• Never ignore the fine print of your loan agreement

Conclusion

Hopefully, we’ve made it clear that refinancing your student loans is something you can do. The process isn’t as hard as you might think, and the benefits are pretty clear: lower monthly payments and a shorter repayment period. If you have federal loans and are looking for a way to lower those payments now, consider refinancing through SoFi. We offer competitive rates on fixed-rate loans of all sizes—as well as some great perks like free financial advice from our experts—and we make applying online simple so that you can get started right away.