3 Reasons Why People Refinance Their Student Loans

There are many reasons why we might choose to refinance our student loans. No reason is necessarily better or worse than any other; it depends on our individual goals. At StudentFi, we help you achieve those goals based on your situation. Here are three reasons we might consider refinancing:

• Lower interest rates

We can potentially save thousands of dollars in interest payments by refinancing with a new loan at a lower interest rate. Depending on when we took out our loans, we could be eligible for lower rates simply due to changes in the market or because of improvements that we’ve made to our credit scores. For example, covid-19 rates are lower than ever making a great time to refinance.

• Lower monthly payments

Depending on the terms of the loan, our new monthly payments may be lower than the payments we’re currently making. This can free up money to pay down principal even faster or work towards other financial goals. We encourage you to apply to all our partners and compare rates and monthly payments. (link to https://studentfi.org/get-started/ ) 

• Cosigner release

If we originally borrowed with a cosigner, our lender might allow us to release the cosigner once we’ve met certain income and repayment requirements. Not all lenders allow for this, though. StudentFi currently has three partners that do; reach out to support@studentfi.org if this applies to you. If we want to release our cosigner but our lender doesn’t let us, refinancing can take care of that for us. 

Before pursuing student loan refinancing, it is important that you understand exactly why we do it. Our goals for refinancing will affect our financial playbook in the coming months as deferment (grace periods) are coming to an end — and loans are entering the repayment. 

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