How to Refinance Student Loans
Evaluate your loans., Tie your monthly payment to your income., Visit the United States Department of Education's Direct Loan Program online.
Step-by-Step Guide
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Step 1: Evaluate your loans.
Federally-guaranteed student loans are funded by the government and have a number of benefits.
Private student loans can come from a variety of lenders including banks, credit unions, state agencies, or schools.
Generally federal student loans have lower interest rates than private loans.
Some federal loans also allow for a grace period upon graduation.
For example, a Stafford Loan has a six month grace period so that you don’t need to begin repaying the loan immediately after graduating.
Most private loans do not offer a grace period and you need to begin to pay them back as soon as you graduate.If you have multiple loans, pay off loans with a higher interest rate first so that you don’t accumulate more debt. -
Step 2: Tie your monthly payment to your income.
Some federal student loans will allow you to create a repayment plan that is based on your income.
For example, your monthly repayments will directly reflect the amount of money that you make which will ensure that you can afford to pay off your student debt.
If you have a private loan you will need to talk to your lender to determine if they can create an income based repayment plan., Direct Loans are funded by the U.S.
Department of Education through your school and are managed by a loan servicer, under the supervision of the department.
The Direct Loan Program allows you to choose your repayment plan and to switch your plan if your needs change.Take advantage of your public service career.
The College Cost Reduction and Access Act of 2007 established a public service loan forgiveness program that discharges any remaining debt after 10 years of full-time employment in public service.
You must have made 120 payments as part of the direct loan program in order to obtain this benefit.
Only payments made on or after October 1, 2007 count toward the required 120 monthly payments.
Borrowers may consolidate into Direct Lending in order to qualify for this loan forgiveness program starting July 1,
2008. -
Step 3: Visit the United States Department of Education's Direct Loan Program online.
Detailed Guide
Federally-guaranteed student loans are funded by the government and have a number of benefits.
Private student loans can come from a variety of lenders including banks, credit unions, state agencies, or schools.
Generally federal student loans have lower interest rates than private loans.
Some federal loans also allow for a grace period upon graduation.
For example, a Stafford Loan has a six month grace period so that you don’t need to begin repaying the loan immediately after graduating.
Most private loans do not offer a grace period and you need to begin to pay them back as soon as you graduate.If you have multiple loans, pay off loans with a higher interest rate first so that you don’t accumulate more debt.
Some federal student loans will allow you to create a repayment plan that is based on your income.
For example, your monthly repayments will directly reflect the amount of money that you make which will ensure that you can afford to pay off your student debt.
If you have a private loan you will need to talk to your lender to determine if they can create an income based repayment plan., Direct Loans are funded by the U.S.
Department of Education through your school and are managed by a loan servicer, under the supervision of the department.
The Direct Loan Program allows you to choose your repayment plan and to switch your plan if your needs change.Take advantage of your public service career.
The College Cost Reduction and Access Act of 2007 established a public service loan forgiveness program that discharges any remaining debt after 10 years of full-time employment in public service.
You must have made 120 payments as part of the direct loan program in order to obtain this benefit.
Only payments made on or after October 1, 2007 count toward the required 120 monthly payments.
Borrowers may consolidate into Direct Lending in order to qualify for this loan forgiveness program starting July 1,
2008.
About the Author
Robert Sanders
Robert Sanders is an experienced writer with over 2 years of expertise in non profit. Passionate about sharing practical knowledge, Robert creates easy-to-follow guides that help readers achieve their goals.
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