There are different types of loans that can be acquired when you are looking to refinance. Oftentimes the rates that you can receive from the new lender who is refinancing your loan with you can vary depending on the type of loan you have, and the amount of the loan that is left to pay off.
When it comes to federal student loans, for example, the interest rate attached to your loan is fixed, meaning the rate will not change from what it was when you initially took out the loan. In this way, your rate never changes, and you can pay off your debts with the same interest rate for as many years as it takes to pay off. On the other hand, if you have a private student loan, then your rate will be determined by what your lender asks for, your credit score, and whether your loan was a fixed or variable APR, or annual percentage rate.
What’s more, federal student loans typically have lower interest rates than private student loans. Federal student loans—which around 92% of all student loan borrowers have—typically range from 3.73% to 6.28%. On the other hand, interest rates on student loans that come from private lenders can be much higher generally. Average rates on private loans for student debt typically range from 3.34% to as high as 12.99% for a fixed rate, and 1.04% to 11.98% for a variable rate.
When you are looking for lenders that are right for you, there are many lenders you can find that do not charge any application fees or origination fees, that have zero payment penalties, that have flexible repayment terms—meaning you can adjust your interest rate sometimes depending on the situation. You can often find economic hardship payment options, and you can even find autopay interest rate reductions!
There are many lenders who do not offer any of the features listed above, so it’s important to find one who has these benefits to help you have a better experience that can save you even more money.
When you are looking for quotes for your student loans, it’s always optimal to have a good credit score so you can negotiate a smaller interest rate. Depending on whether you ever have taken out a loan before, you can also find lenders who specialize in giving refinancing loans to people who have a relatively new credit history, and for whom other lenders might ask for large interest rates but are willing to offer smaller interest rates to new borrowers.
By Admin –