Student Loan Mistakes
Most graduates are leaving college today with a loan to repay. The loan repayments can be overwhelming for everyone, let alone a fresh college graduate who is just getting started on a career and have little or no assets to speak about. If this sounds like something you are going through you will be happy to know that there is an easy way out of your predicament. There are different student loans refinancing options available at your disposal that will make your loan repayment much more affordable and manageable.
While student loan refinancing is designed to ease the student loan burden, the strategy comes with a number of features that you need to consider before you make a decision. These features include;
1. A longer repayment period since refinancing reduces the amount of money paid at any given time. This means that while you while you will be able to comfortably meet your loan obligations, you will have to worry about your student much longer.
2. With the prolonged loan repayment period, you can also expect to pay much more as the interest increases as the repayment period increases.
3. You may lose out on some of the loan benefits associated with student loans. Some of these benefits include loan cancellation or loan forgiveness programs and huge loan interest rate discounts.
4. You can refinance your loan in such a way that you are able to clear your student loan much faster and save quite an amount in the end. This strategy is best suited for the borrowers with private loans who wish to take a risk and save some money by repaying their loan at a much lower rate.
After carefully considering all the above mentioned features, you may still find out that refinancing is still the best option suited to match your unique financial position. You can then go ahead and consider the two main refinancing options and choose the one that works best in your situation. The two main refinancing options include the direct consolidation loan that is best suited for those with a federal student loan. The other option is private consolidation. For you to qualify for private consolidation, however, a credit check must be done and this will to a large extent determine the rate of interest that will be charged on your loan. If you have a good credit score, you can rest assured that will get a much better rate compared to someone with an average rating.