It’s a new year—and the perfect time to take a fresh look at your student loans. With recent changes in the financial landscape, now is a great time to consider a change if you are one of the 40MM+ individuals with student debt. Refinancing and consolidating student loans can be a financial game changer: You can pay your debt in a single monthly payment and potentially lower your rates—meaning less interest and more peace of mind.
Here are our top five tips to help you navigate and understand student loan refinancing.
1. Know Your Loans
Make sure to take inventory of the current loans you have. Which lenders are they with? Are they private or federal loans? What’s the balance owed and the interest rate for each loan? It’s important to know where you are today to better evaluate your best options for student loan refinancing.
For example, the Federal Direct Loan consolidation program won’t let you combine your private and federal student loans to a single payment or interest rate. You should also understand what deferment and forgiveness benefits are, and if they’re applicable to your loan and circumstances.
2. Do the Math
In order to better understand how much you’ll benefit from refinancing, it’s best to know your numbers: Specifically, the overall balance owed and average interest rates across both your federal and private loans. Once you have that info, you can use an online Student Loan Calculator to see how refinancing will impact your current situation and the monthly and lifetime savings you can expect (if applicable).
3. Understand Fixed vs. Variable Rates
This is important, as most lenders will offer both fixed and variable interest rate options when refinancing student loans. Which one should you choose?It depends: Do you want your rate to stay constant long-term or start out low and adjust incrementally? Head over to our fixed vs. variable rates page for a helpful overview of fixed and variable rates to see what best suits your needs.
4. Choose a Lender
When it comes to choosing a lender for student loan refinancing, you’ve got options. There are many helpful articles and online resources to find the right lender for you, but ultimately you’ll want to find a refinancing partner that offers a competitive rate. Additional benefits can also be helpful—like payment deferral (in case of job loss), career coaching, or discounts on other financial products that can save you money.
Here are a few sites that may be helpful in finding the best match for your student loan refinancing: Student Loan Hero , Magnify Money , and Lendedu .
5. Lock In Your Rate
The sooner you refinance your student loans, the quicker you can start meeting your financial goals with a simpler monthly bill or a lower interest rate. So don’t wait—make 2022 the year for action. Check your rate in 2 minutes.
Want event more tips on student loan refinancing? Explore SoFi’s student loan help center for guides, resources, and advice on all thins student loans!
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.