5 Reasons To Refinance Your Student Loans
Most of us have goals, and most of the time, accomplishing those goals cost money. When people think about saving, they rarely think about refinancing their student loan debt. But, for those willing to think outside of the box, student loan refinancing could lower monthly payments and may even reduce the total cost of your loan.1 When this expenditure is lowered, it can help you to accomplish your other goals, financial or otherwise. Here are some not-so-obvious reasons to refinance your student loans:
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Save for your dream trip
Paris, France is one of the most desired vacation destinations in the world. But no matter what your dream destination is – whether domestic or international – just thinking about the cost of such a trip can throw you for a loop. By refinancing your student loans and planning in advance, you can dedicate the money you save to your vacation fund and get closer to making your dream trip a reality. Who would have thought that refinancing your student loans could possibly get you closer to The Louvre?
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Help pay for your wedding
The average cost of a wedding in the United States is currently just over $30,000. For some, it’s one of the largest costs they will ever endure at one time, so if refinancing your student loans can help you save for some of those costs, it’s time well spent.
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Put more towards retirement
There’s one thing that almost everyone can agree on, and that is: when it comes to retirement, there is almost never enough in your account. Refinancing your student loans may provide you with savings that can be applied to your retirement fund.
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Invest in your home
Owning a home can be hard work and cost a lot of money, and there are renovations that need to happen every few years just to maintain your home’s value. Stashing the savings from student loan refinancing can help to pay for projects that will add value to your home—and if you ever sell, to your pockets, too.
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Save for a down payment on a new car
Even if you have a brand new car, fresh off of the lot, it probably won’t be too long before you need a new one. If that’s the case, a down payment is likely. If you have a set date for purchasing a new car, refinancing your student loans could help get you to your down payment goal faster.
When Refinancing Makes Sense
If you believe you could be paying a lower interest rate due to interest rate changes, or perhaps improvements in your credit score or debt-to-income ratio (DTI), refinancing could help you save more towards your goals. Please note: you will lose certain benefits associated with federal loans if you refinance, such as access to income-driven repayment plans or loan forgiveness.
How To Qualify For the Best Student Loan Refinancing Rate
For most lenders, with a strong credit history you could be eligible for the best possible rates through student loan refinancing. To get a low rate through refinancing, it is also important that you have a low Debt-to-Income ratio (DTI), and a relatively stable income. The best way to find out what your rates could be with Laurel Road is through applying here (it only takes about 5 minutes).
Learn more about refinancing with Laurel Road here.
- Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
In providing this information, neither Laurel Road or KeyBank nor its affiliates are acting as your agent or is offering any tax, financial, accounting, or legal advice.
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