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3. 4. US Department Of Education – Federal Student Aid Resources:
5. US Department Of Health And Human Services (HHS) – Paying for College:
6. How To Choose A School That Repays Student Loan Debt:
7. 8. U.S. 9. 10.
If You Are Currently Paying Off Your Loan…
You may have heard about refinancing student loans. But what does it mean? Well, it means taking out another loan! That’s right, if you currently owe money on your Navient student loan (or any type of federal loan), you’ll want to know how to refinance your payments.
How Does Refinancing Work?
If you already own your student loan debt, refinancing simply means getting a second loan that covers the interest rate of your first loan while paying off your principal balance faster. So instead of having two loans, you now only have one loan.
Does Refinancing Make Sense?
Refinancing makes sense if you’re struggling to pay down your student loan debt. But keep in mind, you need to think carefully before doing this — not only will you likely incur additional fees, you could end up owing even more in the long run.
What Is the Best Way to Refinance My Payments?
The best way to refinance your student loans is to apply online at the U.S. Department of Education website. Just log onto www.studentloans.gov and follow the prompts to get started on your application. Most people should receive their options in less than 10 business days.
What Do I Need to Know Before Applying?
Before applying for a student loan, here are some things to consider:
*Your monthly payment amount is based on your income and family size.
*You can’t refinance your loan if you’re behind on making payments on your existing loan.
*You can consolidate your loans into one single loan, but you won’t qualify for refinancing unless you’ve paid off your entire balance.
*Do you plan to stay in school longer than just four years? If so, then you can’t refinance your student loans without repaying them over time. Repayment terms vary depending on your program and whether you graduate early.
Description: We take a look at the Navient student loan refinance program. In October 2015, Navient announced the launch of the federal income based repayment plan (IBR) for their private loans. IBR is a modification of the existing standard Federal Family Education Loan Program (FFELP) where monthly payments are determined by the borrower’s discretionary income. To qualify for the modified payment plan, borrowers have two years to pay back their principal balance. Once the original grace period ends, interest only accrues during the first 12 months of payments while the remaining 22 months are paid back with principal and interest. While the payment plan is similar to an Income Based Repayment Plan, it differs in how it impacts the total amount repaid over time. Under the prior FFELP, borrowers were not obligated to start repaying until after 5 years had elapsed since they entered school. However, under IBR, borrowers are required to enter repayment immediately following graduation. Also, unlike the FFELP, the IBR does not require any type of payment history or credit score when applying.
How do student loans work?
Student loans are debt incurred in order to pay for college expenses. Many people take out these loans to help fund their education at four-year colleges, community colleges, vocational schools, and universities. At many schools, students who receive financial aid from their school are eligible to borrow money from private lenders called student loan companies. After graduating, you must begin making payments on your loans. Most students make monthly payments directly to the lender each month. However, if you cannot afford to pay off your student loan, you may qualify for federal government programs.
What happens when I make my first payment?
Once you have graduated, any remaining balance on your student loan(s) becomes due. If you do not pay back the entire amount owed, you will owe interest on the unpaid portion. You will then be subject to late fees and eventually default on your loan. Defaulting on your loan will cause your credit history to suffer and may affect your chances of getting approved for future loans.
Can I refinance my student loans?
There are two types of refinancing: fixed rate refinancing and variable rate refinancing. Fixed rate refinancing involves paying off your loan over a set period of time (e.g., 15 years). Variable rate refinancing means paying off your loan over different lengths of time (e. g., 5 years; 10 years; etc.). These options are only offered to borrowers whose current interest rates are higher than what they were when they borrowed. As a result, you could potentially save yourself some money by refinancing. But keep in mind, refinancing does not always benefit you.
What are the advantages and disadvantages of refinancing?
Refinancing is a great way to get rid of old, high-interest student loans. But you need to weigh the pros and cons before deciding whether or not to refinance. Here are the primary benefits of refinancing:
Lower Interest Rate: When you refinance you can lower your interest rates. A lower interest rate can mean saving money on your monthly payments.
More Money Available for Other Purchases: Since you no longer have to pay back your original loan, you now have extra money to spend on other things.
Loan Consolidation: You can consolidate your student loans into one low-rate loan. This helps simplify repayment, since you only have to repay one loan instead of several.
The primary drawbacks to refinancing are:
Increased Costs: Your monthly payments increase. This means you’ll have to come up with additional funds to cover the added costs.
Riskier Financial Situation: If your finances change after you’ve taken out a new loan, you may find yourself unable to meet your obligations. Remember, you’re still obligated to pay back the same principal amount, even though your interest rate may have dropped.
Overall, refinancing your student loans is a smart move. Make sure you compare your options thoroughly, so you don’t end up paying more than necessary.
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