The Advantages of College Loan Refinance
A college loan can be a really wonderful thing, as it allows students to attain the post-secondary education that they are interested in, something which they may not have been able to do otherwise. Many people find that they want to go to college but if they have not saved over the years it can seem impossible to find a way to get that amount of money together in time.
With a college loan, you are offered the money to get into college and to pay for your schooling. You do have to pay the loan back, at least in most cases, but the fact that you are getting money upfront to use for your education is well worth the loan repayment which typically includes an annual interest rate charge as well.
College Loan Refinance
After you have received your college loan and it is nearing the time for you to begin making payments on the loan or perhaps you have already started, there is the option of a college loan refinance. Quite similar to mortgage refinancing, the purpose of a college loan refinance is to attain lower monthly repayment bills.
You have a few different options when it comes to a college loan refinance, including standard repayment plans, extended repayment plans, graduated repayment plans, and income contingent repayment plans. Remember that before you enter any repayment, you will receive information regarding the four different payment plans mentioned here. It is important that you take the time to understand about each and determine which is going to work best for you.
Refinancing rates are usually one or two percent lower than what your original college loan rate was which means that you will be saving yourself money as an end result. However there are also certain drawbacks to a college loan refinance, which you are also going to want to be aware of.
For one, in order to get your college loan payment lower through refinancing you are given a much longer time period to pay the loan off. This means that if you were given say five years initially to pay it off, it can turn into twenty with a college loan refinance. Although this may sound all well and good because it will initially leave you with extra money, as an end result you may actually be shelling out even more money because you will be paying interest for a longer duration of time.
