Find My Rate

Need A Lower Student Loan Payment? Refinance With Flexible Terms

Published on Author Adam Sisson

need-lower-student-loan-payment

Are your finances strapped? You may be looking for fast and simple ideas to cut extra expenses. An effective — and often underutilized — solution to free up more room in your monthly budget could be lowering your student loan payment.

It’s widely known that student loans are a serious problem across the country, burdening hundreds of thousands of young people and families with high-interest debt. If money is tight and you feel cornered by your student loan debt, student loan refinancing can be one of the best ways to drop your student loan bill.

How to Lower Your Student Loan Payment Through Refinancing

Decreasing your student loan bill can add essential funds back into your budget every month. For many student loan borrowers, student loan refinancing is an excellent option to lower their payments – quickly and easily.

First, what is student loan refinancing? Refinancing is a debt management strategy where you take out a brand-new loan with a different private lender for the amount of your existing college debt. This process combines all your separate student loans into a single loan — with a new interest rate and updated terms of your choosing.

One of the great things about refinancing is you can consolidate federal student loans, private student loans, or both. Plus, a student loan refinance is customizable to your financial needs and student loan payoff goals. So if you’re looking to lower your student loan payment, refinancing might allow you to do just that — by selecting a longer repayment term than you currently have.

For example, many student loan borrowers are on a standard 10-year repayment plan. However, student loan refinancing often provides the opportunity to extend your term significantly. PenFed offers repayment terms up to 15 years, for those who qualify. You’ll be paying off your student loans for a lengthier time period by using this strategy. And often, you’ll end up paying more in total interest over the length of your refinanced loan. But if you’re short on expendable cash, choosing a longer term can substantially lower your student loan payment — which could be a top priority to give your budget some breathing room.

Other Student Loan Refinancing Benefits

In addition to dropping your student loan payments, student loan refinancing provides many other useful benefits.

  • Save Money With a Lower Rate. If you have good credit and a steady income, you may be able to qualify for a lower student loan interest rate than you currently have. A lower rate could mean big savings on interest costs — both month-to-month and over the lifetime of your loan. Plus, if your credit isn’t in the best shape, you can apply with a creditworthy cosigner to improve your odds of being offered the best available rates.
  • Consolidate and Simplify Your Student Loans. Student loan refinancing combines the existing student loans of your choosing into a single new loan. That means after refinancing, you’d have just one payment with one loan servicer to worry about and plan for. Having just one monthly student loan bill can provide relief in itself and make it easier to stay on top of on-time payments.
  • Drop a Cosigner. The refinancing process can also give you the chance to drop an existing cosigner from your student loans. If a parent, relative, or close friend is currently a cosigner, you can release them from any financial obligation on your refinanced loan going forward.
  • Select a Variable Interest Rate. Student loans often come with fixed interest rates — meaning they never change. However, with refinancing, you could choose to switch to a variable rate loan. Although variable rates could go up or down over time, they typically start lower and may help you save more on interest upfront.
  • Take Over Parent PLUS Loans. If your parents took out Parent PLUS Loans to help fund your education, you may choose to take over that debt in your name by refinancing — and let them off the financial hook.
  • Combine Student Loans With Your Spouse. If you and your spouse both have student loan debt, PenFed offers a unique option for married couples: a Spouse Loan. With this type of refinancing, you can take advantage of all the key refinancing benefits — while combining all of each partner’s debt into one easy loan. Plus, a Spouse Loan combines your income and debts to determine whether you’re eligible for a refinance, and the interest rate is based on the higher of your two credit scores and degrees.

Choosing Flexible Refinancing Terms With PenFed

If you’re in a financial situation where lowering your student loan bill could provide immense relief, PenFed Credit Union is an excellent choice. Currently, PenFed offers extended repayment terms of 12 and 15 years – providing the flexibility to get the monthly payment you need.

Ready to see the interest rates and repayment terms you qualify for? It takes less than 5 minutes with PenFed. Simply fill out some basic information about yourself and quickly view your pre-qualified options with PenFed’s Find My Rate tool.

See your student loan rate and term options now and take a big step toward financial peace of mind.

To receive any advertised product, you must become a member of PenFed. PenFed Credit Union is federally insured by NCUA.