Best lenders for consolidating student loans
Private student loans can also come in handy for unexpected educational costs that aren’t covered by a federal loan.When you graduate or leave school, your student loan will go into repayment and you will need to assess whether or not your loan is really the best deal out there.
Are you stuck paying 6% on your federal student loan debt? You need to know that you can consolidate student loans to a lower interest rate with a private student loan lender.In this guide we will look at federal student loan consolidation, private student loan consolidation, as well as the potential risks that may arise when you consolidate student loans.Consolidating and refinancing private and federal student loans together is a great idea if you have multiple student loans, and are trying to save money.Direct Unsubsidized Loans do not require borrowers to have demonstrated financial need and start to accumulate interest as soon as they are awarded.Sometimes a federal loan isn’t enough to cover the entire financial need and borrowers will fill the gap through a private student loan.Refinancing and consolidating student loan debt can be a great way to save money and take advantage of today’s low interest rates.
Refinancing can save you money each month through lower payments, and save you money over the life of the loan through lower interest rates.
The first place you should look for help paying for school is scholarships and grants. If you’ve maximized those opportunities, see if your college offers a work-study program.
Work-study jobs are government-subsidized and are available to students who demonstrate financial need.
"Student loan refinancing is a relatively new concept and we've seen real increases in volume over the past 12 months," said Nick Clements, co-founder of price comparison website Magnify Money, which tracks private lenders that provide student loan refinancing.
Social Finance, known as So Fi, sparked the latest boom in student loan refinancing in 2011, Clements said.
The average borrower can save nearly $14,000 by refinancing their student loans, according to calculations by Credible, an online marketplace for lenders that offer student loan refinancing. Borrowers who refinance with private lenders can't take advantage of income-based repayment plans and public service loan forgiveness provided by federal loans.