Refinancing a student loan is the right choice in the following situations:
When you find a loan with a better interest rate.
When you work in the private sector, such as a non-government organization or government agency. This brings eligibility for student loan forgiveness.
To improve your credit score. Refinancing your student loan will raise your credit score and allow you to get a better interest rate.
In which cases you shouldn’t refinance?
- When you have existing credit card debt. Despite not having enough money to pay your credit card debt, you risk getting a higher rate.
- When you don’t have emergency funds for at least three months. After refinancing, you might lose access to federal benefits.
- If you want to fulfil all requirements for IDR since they only accept federal student loans.
In recent posts, we covered the things that you need to know regarding student loans. Also, don’t miss our post on student loan forgiveness.