What is refinancing?
What is refinancing and how does it work?
On a basic level, you’re taking out a new loan to pay off your old loan. With student loans, you have the power to consolidate many into one single loan, usually for a lower overall cost.
Since you’re employed and are perceived as ‘less risky’, your new loan ideally has a lower interest rate, saving you money in the long run.
Refinancing is great for people with high interest student loans, especially private. Right now, federally held student loans aren’t incurring any interest until at least September 30, 2021. As a result, borrowers with federally held loans are largely waiting until then before considering refinancing.
For private loan borrowers, there’s little downside associated with refinance, and a large potential upside in terms of savings, and reducing your monthly payment. If you have both federal and private, know that you may consider only refinancing private loans at this time, which is an option that many Juno members opt for. You're free to refinance whichever assortment of loans you choose without being forced to refinance all at once.
Note that you may lose benefits associated with your underlying federal and/or private loans if you refinance such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other determent and forbearance options common with federal loans. If you file for bankruptcy, you may still be required to pay back this loan.
That said, you should always consult a financial advisor before taking any action. This article is not intended to be financial advice, and we urge you to do your own research independently.
If you can answer these ten questions, you can probably go get customized rates within 5 minutes:
- Email Address
- Citizenship status
- Graduation date
- School name
- Student loan balance
- Rent/mortgage payment
Juno came into existence to help students save money on student loans and other financial products through group buying power by negotiating with lenders. The Juno Team has worked with 50,000 students and families to help them save money.
Related ArticlesView All Articles
Why The Internet is Full Of Wrong Parent PLUS Calculators
There are plenty of Parent PLUS loan calculators on the internet, but a lot of them are incorrect. Read why that is in this article.
Which Student Loan Term Should I Pick
Are you having trouble deciding what student loan terms are the best option for you? This article will help narrow down your options.
Federal Student Loans: What are the Benefits
Understanding the pros of federal student loans is important when deciding how to finance your education. Read about them here.
5 Top Questions and Answers About Parent Plus Loans from Reddit
When figuring out how to pay for your college education, parents typically have input and can offer help. This article explores common questions about the Parent Plus Loan.
Are Student Loans Worth It?
If you need to borrow money to pay for school, you may be wondering, “Are student loans worth it?” Before taking out debt, think about cost and potential earnings.