Christian Private Student Loan Refinancing
Private student loan refinancing can help people who owe money for college or graduate school manage that debt more efficiently. Very few students finish secondary education without borrowing some funds. While most educational loans are subsidized by the federal government, some students need to borrow extra money from private institutions to fill in the gaps left over when all government-based funding has been exhausted. Private lenders who extend credit to students believe that education will enable that individual to gain more income after school is completed. Therefore, non-government funding tends to carry higher interest rates than standard federal loans. Former students can use a private student loan refinancing program to restructure educational debt into a form that works for their personal situation.
Government programs lend money to students based on need with interest rates that are linked to a federal index, but private lenders do not operate in the same way. Private financial institutions extend credit based on the borrower's credit history and score. Interest rates and additional fees will vary from lender to lender. Since students normally haven't had the chance to develop a solid credit history, these rates can be high at first. Private student loan refinancing after school can give the borrower an opportunity to negotiate terms and rates if credit has improved since money was first issued. Before refinancing, request a credit report to evaluate and fix any errors that might lower the score. The higher the score, the lower the interest rate. Rates will also increase if payments aren't current or the loan is in default. If there is a hardship, borrowers can apply for a forbearance. If the lender approves, the loan will be reset to its original state.
The primary goal of private student loan refinancing is usually to lower monthly payments to a manageable level. After graduation, money can be extremely tight. Sometimes, the ideal job is not accessible and former students find themselves working from the bottom up. Low pay and a surmountable burden of debt can be very scary. But God promises to ease that pressure. "Come unto me, all ye that labour and are heavy laden, and I will give you rest. Take my yoke upon you, and learn of me; for I am meek and lowly in heart: and ye shall find rest unto your souls." (Matthew 11:28-29) The first thing to keep in mind is not to panic. Many lenders are willing to change the terms of the original contract and extend the repayment period to help a borrower make payments. Shop around and find a private student loan refinancing package that is manageable. Refinancing during the six-month grace period between ending school and beginning repayment can also lower the interest rate up to 0.6% and save hundreds or thousands of dollars in the 10-20 year repayment period.
Because of the nature of private loans, there are fewer options available for consolidation multiple loans into one package. Refinancing with federal loans is not one of those options. Since interest rates on non-governmental borrowing are much higher, the federal debt would have to rolled into the private consolidation and not vice versa. The final payout would be greater than the amount saved on combining the debt. But private student loan refinancing through consolidation can lower monthly payments by lowering the interest rate or extending the terms of the contract up to 20 or 30 years. Keep in mind that stretching out repayment will increase total payout and often will carry and even higher interest rate. If a student's credit did not increase during the time in school, signing with a credit-worthy co-signer or guarantor can lower the interest rate significantly. Students going straight from school into an unpaid internship or residency program can defer repayment up to 48 months and those going into active military duty can defer up to 36 months. Repayments are delayed, but interest does accrue during this period and is added to the principal balance.
Most banks and financial institutions offer some kind of private student loan refinancing assistance. These lenders have different qualifications for refinancing, so be sure to check all the fine print before deciding on a particular lender. Just about all of them require for borrowers to be out of school before refinancing and that the current loans be in good standing. Many will have minimum and maximum limits on educational refinancing. Some carry prepay or repayment penalty fees that can be quite extensive. Others offer incentives such as a 0.25% rate reduction for setting up automatic debits out of checking or savings accounts and other reductions for paying on time for 36 or 48 months. Another option is to consolidate through a home equity loan. Interest rates are generally low and similar to educational loans. Home equity financing will also lock the loan into a fixed rate, which doesn't fluctuate like the adjustable rates that most educational financing contracts offer. Taking this route does carry extra risk. If a borrower defaults, he loses his home.
Many financial advisors suggest paying off federal loans before tackling the private ones. Because of higher interest rates, others suggest paying off the non-federal funding first. Whichever is the best option, private student loan refinancing can help tailor repayments to an individual's unique situation. However, until refinancing has been complete, it is very important to continue paying the current balance on time to avoid penalties and maintain a positive credit rating. With time, as income increases, borrowers can refinance again to reduce payment terms, lower interest rates, and repay the loan in a timelier fashion, saving more money and gaining peace of mind.
Refinance A Christian Student LoanTo refinance a student loan or not really depends on what the benefit is for the graduating student in terms of interest and repayment schedules. Options included in an offer include low interest rates, longer repayment terms, and forbearance, or deferment options. Government backed student loans offer the best benefit to most students and usually the lowest interest rate. However, in order to receive these wonderful benefits some sort of consolidation must be done. In essence to refinance means to consolidate.
The old loans from individual lenders are paid in full, while a new combined loan is brought forth. These new loans can extend payments up to 25 years post graduation or withdrawal from school. If a student is planning to refinance a student loan, there are some issues that must be in order to qualify. The first issue begins in school attendance. If the student is still in school, they may have to wait until they graduate or withdrawal and their grace period ends. For those that have been out of school and have been making regular payments on one or more loans, this option may be a great benefit.
It is important to note that while financing is in process, it is necessary to continue to make payments on the old agreement. This will ensure no discrepancies and unintentional bad marks on a credit report. Graduating students are just beginning their independent lives. Starting out with bad credit makes life a lot harder than it has to be. Once the loan is processed and a new payment voucher book is issued, the student can begin making payments to the new loan. Typically when someone wants to refinance a student loan, a large benefit is that of new deferment periods. If a student has previously used up their deferment or forbearance options, a new loan can allow them those options again. It is important to have a budget and to understand personal spending limits even on debts owed. John 10:10 offers encouragement by saying "The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have it more abundantly." Money and debt should not run anyone's life, God should. Make sure He is the base of any financial plan.
To refinance a student loan effectively, detailed information about each lender and the balances held need to be provided. If this information is not easily obtainable due to the fact that loan companies sell loans to other companies daily, there are some lenders that will do the research for you. The applicant is responsible for the outcome, and if any legitimate loans were not included in the new loan, they will have to be paid off separately. Accurate record keeping in the college years is of utmost importance later in life. Once a person has completed the process, they can sit back, relax, and enjoy the extra money they saved.
Refinance your private student loans now and lock in to the lowest interest rate in years in order to benefit with significant savings on education money. Over the course of undergraduate or graduate degree programs, students can amass huge debts in order to get the education they need to enter a chosen field. Recognizing that a college graduate generally receives up to 80% more lifetime earnings that a high school graduate, parents and student alike are willing to invest in the future through education money. By the time graduation rolls around, many students have of necessity borrowed lots of money to defray education costs. You may have just graduated and would like to refinance in order to drop interest rates and monthly payments.
Borrowing money is a necessary part of student financial aid that must be repaid with interest to the lender. There are Stafford loans, both subsidized and unsubsidized, that are offered through the Federal government for those who meet the criteria. Personal loans can also be assumed as well as private education loans offered through banks and lending institutions. Many of these loans can be refinanced and consolidated for easier payoff. These sources provide easy, quick and effective answers on how to refinance your private student loans. "He that gathereth in summer is a wise son: but he that sleepeth in harvest is a son that causeth shame." (Proverbs 10:5)
Anyone can receive approval relatively easily, but it is important to find the best deal. Many lending companies require no credit checks and very little if any fees to refinance your private student loans. It is easy because there is no lengthy, government application process. Your private student loans can be refinanced to consolidate all money owed into one, unsecured loan. There is no risk to home equity or other assets because collateral is not required. If you choose this option, you can reduce your overall repayment obligation sometimes as high as 50% or more.
It is also well worth it for the convenience of one monthly payment. In order to refinance your Christian private student loans, some lenders require a certain debt minimum and require you to have entered repayment or be within the grace period of the loan. It is very easy to apply online and receive approval for your private student loans. There are lending sources ready to answer all your questions and set up the loan program that suits your personal needs.