Private Student Loan Refinancing
A private refinance loan combines several existing private student loans into a new, single loan. Offered by banks, credit unions and other financial institutions, a private refinance loan can reduce the pressure on your budget, making it easier to manage your education debt.
Benefits of Private Student Loan Refinancing
- Cut the monthly payments on your student loans
- Streamline repayment by replacing multiple loans with a single loan
- Qualify for a lower interest rate if credit score has improved
- Release the cosigner from current loans by qualifying for a refinance loan without a cosigner
- Pay off loans early with no prepayment penalties
Monthly Payment Relief
One of the key benefits of refinancing your private student loans is payment relief. When you combine all of your private loans into one refinance loan, your lender may extend your repayment term, which usually reduces your payment. (Note that increasing the repayment term may increase the total interest paid over the life of the loan.)
With a lower monthly payment, you’ll have more money available to cover living expenses and pay off higher interest rate debt. When it becomes more affordable, you can make larger payments to pay off your refinance loan faster and save money on interest.
This table shows the potential reduction in the monthly loan payment and increase in total payments with a 6.8% fixed-rate private refinance loan.
|Loan Amount||Monthly Payment Before Refinancing
|Monthly Payment After Refinancing
|Decrease in Monthly Payment||Increase in Total Payments|
To learn more about private refinance loans, review answers to frequently asked questions about private student loan refinancing.