Top 5 Reasons To Refinance Students Loan Now - Make Lemonade

Top 5 Reasons To Refinance Student Loans Now

By Make Lemonade Staff | Updated September 11, 2019

With near-historic low interest rates, there is no better time than now to refinance student loans.

Here are 5 great reasons to refinance student loans now:

1. Refinance Student Loans Reason #1: Get a lower interest rate

Paying 8% for your current student loans?

When you refinance student loans, you exchange your current federal student loans and private student loans for a new, single student loan with a lower interest rate.

Why do you receive a lower interest rate when you refinance student loans?

Now that you are working, have a steady income and have demonstrated financial responsibility, lenders will look at you differently than when you were a student and they charged you a higher rate for your student loans.

From the lender’s perspective, the “you of today” has lower credit risk to the lender than the “you of yesteryear.”

From your perspective, that’s great news because a lender can now likely offer you a lower interest rate when you refinance student loans.

A lower interest rate means lower monthly payments and a lower borrowing cost, which means you can save money and can get out of your student loan debt faster.

You can use the Make Lemonade Student Loan Refinancing Calculator to calculate your potential savings from student loan refinancing when you refinance student loans.

2. Refinance Student Loans Reason #2: Change your student loan terms

Stuck with a variable rate private student loan and concerned about rising interest rates?

When you refinance student loans, you can refinance your existing variable interest rate student loan into a fixed interest rate student loan. With a fixed rate student loan, for example, you can lock in your monthly interest rate so that your student loan payments never change.

3. Refinance Student Loans Reason #3: Get better customer service

Who doesn’t want better customer service?

We have all experienced poor customer service, particularly from various financial institutions. The last thing you need when you are trying to pay off student loans is a bad customer service experience.

When you refinance student loans, you can refinance with a more consumer-centric student loan company that places high value on customer service.

You can find our top-rated lenders to refinance student loans at the bottom of this page.

4. Refinance Student Loans Reason #4: Combine all your student loans into one single student loan

If you have multiple student loans from different lenders with different interest rates, you can refinance student loans into a single student loan.

It’s cumbersome to have to keep track of the various interest rates, payment addresses and website logins just to manage your student loans.

One of the key ways to pay off your student loans faster is to consolidate your student loans into one single student loan with one single interest rate and loan term, which makes it much easier for you to manage.

When you refinance student loan, you get one student loan, one monthly payment and one interest rate.

5. Refinance Student Loans Reason #5: Change your student loan repayment term

The current student loan repayment term for federal student loans is 10 years.

When you refinance student loans, you may want to extend or shorten your current student loan repayment term. Why? Your current financial situation is one reason why you would want to change your student loan repayment term. If you need more time to repay student loans, consider increasing your student loan repayment term. Conversely, if you want to pay off student loans faster, you could shorten your student loan repayment term.

For example, if you currently have a 10-year student loan term, but you want to pay off your student loan faster, you can refinance student loans into a 5-year student loan term, which can enable you to save on the extra interest costs and pay off your student loan faster. Or, you could extend to a 20-year repayment term.

When you refinance student loans, lenders typically offer repayment terms between 5 and 20 years. With a longer repayment term, you will pay less money each month, but you will pay more money overall due to more total interest costs over a longer period. A shorter repayment term will increase your monthly payment, but will save you money because you will pay less overall interest.

Refinance Student Loans: Next Steps

And these are just 5 great reasons to refinance student loans….you can check out the top-rated lenders below to learn more about the other benefits when you refinance student loans.


Best Student Loan Refinancing For 2019

Lender
Rates (APR)
Minimum Credit Score

Overview

Variable Rates:1.99% - 6.89%
Fixed Rates:3.45% - 6.99%
Minimum Credit Score:650
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5-20 years
Borrower Residency:All States except DE, KY, NV
Unemployment Protection:Yes
Co-signer Option:No

Overview

Variable Rates:2.39% - 6.01%
Fixed Rates:3.14% - 6.69%
Minimum Credit Score:680
Minimum Income:$35,000
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$15,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All States
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:1.99% - 6.65%
Fixed Rates:3.50% - 7.02%
Minimum Credit Score:660
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:2.21% - 7.26%
Fixed Rates:3.46% - 7.36%
Minimum Credit Score:650
Minimum Income:None
Fees:None

Details

Eligible Loans:Private or Federal
Minimum Loan Amount:$5,000 ($10,000 in CA)
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:1.99% - 6.65%
Fixed Rates:3.50% - 7.02%
Minimum Credit Score:660
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5 - 20 years
Borrower Residency:All States
Unemployment Protection:Varies
Co-signer Option:Yes

Advertiser Disclosure