Student Loan Refinancing How Do I Pay It Back

Student Loan Refinancing - How Do I Pay It Back?

Consolidating your student loans is the same as student loan refinancing and will lower the amount of your monthly payments, by lowering the rate, and may extend the life of your loan making it much more manageable.

Refinancing your student loans, or consolidating them, is where you combine 2, 3,4 or 5 college loans, often one for each year of school, into a single loan.

Repaying your student loans can be a big part of your budget, so lowering your monthly expense and refinancing your student loans only make sense, in that consolidating the loans makes your monthly payment lower.

When the student loans are federal (Stafford loans) the average interest rates of your existing federal loans, the ones you are consolidating, rounded by 1/8 of a percent, are how the rate on your new consolidated loan is determined.

The lender who is giving you the new consolidated loan will pay off each of your other student loans and will then expect your payments to begin in 30 - 60 days.

By consolidating your loans you can reduce your monthly payment by 20 - 40 percent. which could mean a monthly savings of $100's, even $1,000's each month.

Not Bad

* Repayment Options *

Your choices for repayment will be much like your repayment options before you consolidated your student loan.

1. The standard payments are monthly payments that do not vary until the loan is paid off over a predetermined period of time.

2. Graduated payments mean that you will make monthly payments on your consolidated student loan, the next one always slightly higher than the previous one.

3. Variable payments allow for a fluctuation based on your income and changing financial responsibilities.

4. Extended payments allow you to make smaller loan payments over a longer period of time.

Some lenders charge fees to consolidate your student loans, however most companies don't charge additional fees.

Some lenders may also require a credit check, although most don't.

Some lenders not only give you a low rate, but give you a reduction in your interest rate up to 1.25% if you make your payments on time for 24 months.