meet zoe. zoe recently graduated from college and hasbeen working at corporate co. for the past two years. recently, an older colleague told zoe shemight be a good candidate to save money by refinancing her student loans.
Student Loan Conslidation, while zoe is definitely open to the idea ofsaving money, she just doesn’t feel comfortable taking someone’s advice without understandingthe process herself. that’s where we come in. let’s start with basics.
what is student loan refinancing? well, it’s the practice of combining multiplefederal and/or private student loans into one, simple private loan. this has definite advantages, mainly a lowerinterest rate on the new loan, but it also serious flaws, mainly because you lose theadvantages of federal student loans, such tax as income-based repayment plans. so which one she should choose? well, we recommend this rule of thumb: unlessyou have an annual income that exceeds your student loan amount, plus a credit score above700, avoid refinancing your student loans,
especially your federal ones. that’s because for low-earners with poorcredit, no private lender can match the benefits of an income-based repayment plan. plus, if you work in the public or nonprofitsector, your federal student loan debt can actually be forgiven after ten years! for details on this, be sure to watch ourvideo “how to repay your student loansâ€. however, let’s say zoe has meet our requirements,and has chosen to refinance her student loans. what’s her next step? well, zoe will need to reach out to severalstudent loan refinancers.
and don’t worry, this doesn’t have tobe time-consuming, especially if zoe uses our recommended provider, which makes it easyto get multiple refinancing offers with one simple application. finally, let’s say zoe only chooses onlyto refinance her private student loans. can she consolidate her federal ones withouta private lender? as it turns out, yes. she can combine her federal student loansinto a direct consolidation loan for free through studentloans.gov. this will eliminate the confusion of havingmultiple payments while still keeping the
benefits of federal student loans. congratulations! you have finished our financing your educationcurriculum! if you want to see our preferred student loanrefinancer, or just more educational material, be sure to check out our website!
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