Refinancing a student loan is one of the smartest financial moves you can make. The interest rates on student loans are at an all-time high. In many cases, refinancing can help you lower your monthly payments by hundreds of dollars each month—and that’s not even counting the fact that once you’ve graduated from college and landed a full-time job, you’ll have more money to pay down your debt faster! This article discusses some of the primary benefits of a 30-year student loan refinance.
Lower Monthly Payments
Refinancing your student loans with a 30-year term means that you will be paying off your debt over a longer period. This is beneficial because it allows you to lower monthly payments and save on interest over time.
You may have heard of people refinancing their mortgages or car loans, but it’s also possible to refinance student loans! Refinancing involves taking out a new loan to pay off an existing one; this can help if you need more flexibility in repaying your debts or if the interest rates have decreased since signing up for them initially (which happens often).
One of the most significant advantages of refinancing your student loans is that you no longer need to worry about interest rates, loan payments, and how much money you owe. Instead of paying off one loan at a time, which can be difficult if you have multiple student loans with different repayment dates and terms, refinancing allows you to pay off all at once in one lump sum payment each month. This makes budgeting much easier because no more decisions are needed when it comes time to repay those student loans!
One of the biggest advantages of refinancing your student loans is the flexibility to choose a term that best fits your needs. You can opt for a longer loan term and lower monthly payments, for example, or a shorter loan term and save money on interest.
A variable rate may also be more affordable than a fixed rate at first glance; however, it’s important to understand that variable rates are subject to change over time–and if they increase significantly, you could end up paying much more than you would have with an initially higher fixed rate (which stays constant).
A Better Credit Score
A higher credit score can make getting a mortgage or car loan easier. A higher credit score can help you get a job. If you’re considering refinancing your student loans, consider the long-term benefits: less stress and more freedom in terms of money management, and higher earning potential in the future because of your improved financial standing. According to financial advisors at Lantern by SoFi, “you can choose to do another 20-year refinance, but you might be tempted to stretch your overall term to 35 years.”
There are many benefits to refinancing your student loans with a 30-year term. Like, you’ll have lower monthly payments, you can consolidate other debt into one loan with better interest rates, and you’ll have access to more flexible options for repayment, such as graduated payments or income-based repayment plans.