Why Would You Consider Refinancing Your Student Loans?
With the average national student debt closing in on $1.2 trillion, and the average student owing about $30,000, it’s clear that student debt is a problem that isn’t going away. With more and more students are taking out loans to pay for school, student debt is a hot topic. Their are many reasons why someone would take a loan for school, but the bottom line is paying back student loans can be overwhelming.
Refinancing student loans provides a variety of options for those looking to for other options to help them get their payments on track. We created a survey to discover why people choose to refinance their student loans.
The survey was completed by 1,000 people and asked the question: “Why would you consider refinancing your student loans?” Below are the responses and their following percentages:
Lower Interest Rates-37.6 percent
Lower Monthly Payments-25.3 percent
Consolidating Into One Payment-16.4 percent
Shorter Loan Term-11.8 percent
Possibility of Having a Co-signer-8.9 percent
The majority of respondents, with 37.6 percent, wanted to refinance their student loans to receive a lower interest rate on their payments. Like debt consolidation, student loan refinancing allows you the opportunity to potentially lower your interest rate, which means less money out of your pocket in the long run.
The next highest response was refinancing student loans for lower monthly payments with 25.3 percent. In some cases you can receive lower monthly payments based on your new interest rate or just by refinancing. Many people are overwhelmed by the amount of money they owe. Lowering monthly payments can help people feel on top of their student debt and get them on track to paying it back.
The least popular response was the possibility of having a co-signer with 8.9 percent. This result was surprising because we thought more people would be interested in co-signing their refinancing to potentially get a lower interest rate or monthly payment.
With student debt becoming more common, more people are looking to refinance their loans than ever. Refinancing student loans allows people to get a better grasp on their debts and start living their life on top of their finances. Our top recommended student debt companies can help you get on top of your debt sooner.
- Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
- Negotiates with your creditors on your behalf.
- Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
- Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
- Combines all your debts and creditors into one monthly payment.
- Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
- You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
- Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
- Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
- Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
- Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
- Borrowers can receive funds from their loan within only a few days.
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