Refinance Your Student Loans To Save $ 5,000 As Interest Rates Hit New Lows
Many Americans spend years paying off student loans, and it can be difficult.
Interest rates have hit record highs lately, giving those with crippling student debt a chance to save up to $ 5,000.
There are a number of advantages to refinancing your student loans, and interest rates last month hit a new low.
The week of November 22 saw the average fixed interest rate for a 10-year loan at 3.35%.
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The variable interest on a five-year loan was 2.41%.
Data shows that the average student debt for Americans is around $ 37,693 at 5.8% interest.
If you were to refinance a ten-year loan with a fixed interest rate of 3.4%, you could save $ 5,200.
Rates have since increased, but it might still be a good idea to refinance these loans.
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What Can Student Loan Refinancing Look Like and What Happens During the Pandemic?
By refinancing your student loans, you take all of those loans and turn them into a bigger loan.
This gives you a monthly payment with a single interest rate.
How you go about it will depend on the type of loans you have.
Federal loans compared to private loans have different interest rates and repayment terms.
Federal loans generally have more positive elements than private loans.
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This includes lower payments, lower interest rates, grace periods, and repayment options tailored to your income.
Before choosing to refinance, consider all of your options.
Currently, many federal student loans are on hold until January thanks to the CARES law passed in March 2020.
Loans held by the US Department of Education are included.
While loans are on hold, there is 0% interest, payments are not required, and there is no collection for overdue loans.
Payments will resume after January 31, 2022.
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