Student loan refinancing is when you apply for a new loan and pay off existing loans. Once approved by a lender, they’ll pay off your old loans and you’ll now have a one new student loan payment.
There are two scenarios in which you may consider refinancing:
- For instance, you may have graduated with one student loan and seeking to save by refinancing into a lower rate loan. You want to have lower payments or shorter term.
- Or you graduated with multiple student loans and seeking to save on interest payments and make one payment as opposed to multiple payments.
In both scenarios refinancing your student loans may be a good option to save money.