Refinancing Your Student Loans Can Save You Over $ 250 Per Month: Here’s How
Your monthly student loan payment can keep you from reaching financial milestones like paying off credit card debt or even buying a home. Fortunately, it may be possible to lower your monthly payment by refinancing yourself, thanks to low interest rates.
Student loan refinancing rates are hovering near historic lows. During the week of July 5, 10-year fixed-rate loan rates averaged 3.65% among borrowers with a credit score of 720 or higher who refinanced their student loans on Credible. This is down from 4.32% just a year ago.
Rates were an average of 3.05% on 5-year variable rate loans, which is among the lowest in all of 2021.
Keep in mind that refinancing federal student loans is not recommended at this time, as it would make you ineligible for federal loan protections such as student loan cancellation and income-tested repayment. But if you have private student loans, now is the time to take advantage of lower interest rates to save money on your monthly payment.
Find out how much you can save on your student loans in the analysis below. When you’re ready to start shopping around for student loan interest rates, visit Credible to compare offers from several lenders without affecting your credit score.
Will BIDEN extend student loan forbearance again? THIS IS WHAT WE KNOW
Here’s how real student loan borrowers cut their monthly payments by over $ 250
Real borrowers were able to significantly reduce their monthly student loan payments by refinancing themselves through the Credible Marketplace, according to an analysis that took place from November 1, 2019 to December 1, 2020.
By extending their loan term by an average of 53 months, borrowers were able to reduce their repayments by $ 253 per month, according to the study. The sample had an average loan amount of $ 70,163 and reduced its annual percentage rate (APR) by 2.05%.
If you want to refinance your private loans in order to lower your monthly payment, it is important to shop around for the lowest possible interest rate for your situation. You can compare the rates of several student loan refinance lenders by filling out just one form on Credible.
COVID-19 HAS AFFECTED THE COLLEGE SIDE: HERE’S WHAT CHANGED
Use a student loan calculator to see how much you can save
It’s easy to see how much you can save on your monthly payment by using a student loan calculator, like the one from Credible. If you are unsure whether or not to refinance your student loans, it is helpful to estimate the terms of your new loan. Here’s how:
- Gather your loan documents. You’ll want to know how much and how much time you have left on your loan, as well as your monthly payment amount and interest rate.
- Estimate your new interest rate. You can see what type of student loan rate you might be entitled to without affecting your credit score on Credible.
- Enter your information into the calculator. Credible’s student loan refinance calculator will show you your new repayment terms, including your monthly savings and total interest paid.
Still not sure whether refinancing is right for you? Contact a credit officer at Credible to discuss your options to decide the best way to repay your student loans.
PARENT PLUS LOANS: WHO QUALIFIES AND HOW TO REFINANCE THEM
Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.