If you’re feeling crushed by your student loan debt right now, you’re not alone. I’ve been there. I get that it can feel like a huge burden you’ll never get off your shoulders.
But listen: There’s light at the end of the tunnel! There are plenty of ways to get intense about paying off debt. In addition to getting on a budget, making some extra income with another job or side hustle, selling stuff, cutting back expenses, and working the debt snowball, one option a lot of people use is refinancing.
Let’s talk about what refinancing is, and if it’s a good choice for you.
What is student loan refinancing?
Student loan refinancing is the process of switching to a different lender to get a better interest rate or faster payoff—or both. If you qualify, the new lender basically pays off your current loans and gives you a better deal with better terms, which is different from loan consolidation. Refinancing gives you a new rate on a mix of either federal or private student loans, while consolidation means combining your loans, so you only have one payment (it doesn’t actually save you money).
Should you refinance your student loans?
Not all refinancing options are created equal, so you have to be careful about the new terms that you sign up for. You should only refinance your student loans if:
Still not sure if refinancing is the best money move for you? This free two-minute quiz will help you figure out if you qualify to refinance your student loans, and help you find a trusted resource to get the job done!