Consolidated loan reconsolidating student
As student loan interest rates shift, refinancing student loan debt may be a cost-effective strategy for reducing the total cost of borrowing.However, there are factors to consider before refinancing multiple times.Refinancing is available through many private lenders, meaning interest rates, repayment terms, features, and total costs differ greatly.Refinancing can be beneficial to student loan borrowers if they are able to secure a lower interest rate than what a consolidation or their original loan terms offered.Refinancing student loan debt with a private lender requires an application, which allows the lender to review a borrower’s credit history and score.Submitting many applications for refinancing might negatively impact one’s score, as credit reports are pulled with each application submitted.Student loan borrowers can refinance their student loans as many times as they would like, so long as their credit and income remain strong.Lenders do not typically put restrictions on how often loans may be refinanced, although borrowers may need to move to a different lender if a refinance was recently completed.
Private student loan lenders do not typically offer income-driven repayment plans or student loan forgiveness, nor do many give the option to defer payments should an economic hardship take place.
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In this case, refinancing can be done directly with a private lender even after a consolidation is done.
To refinance consolidated student loans, student loan borrowers need to simply find the private lender they would like to utilize, complete an application for the refinance, and once approved, make payments to the new private loan lender.
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Keeping some federal loans, ideally those with the lowest interest rates, and consolidating instead of refinancing may be beneficial in maintaining some flexibility for future payments.