Some borrowers want to refinance their loan to get a lower interest rate than they have with their original loan.
This will show up as an inquiry on a credit report which can impact a credit score.
Too many inquiries over a long period of time can lower a credit score, so you need to be certain you want to pursue refinancing and/or consolidating your student loan before completing the application process.
Consolidating student loans with different payment amounts, due dates, and interest rates into a new loan with one payment, one amount, and one interest rate can make it easier to stay on top of your student loan obligation without a payment getting lost in the shuffle.
There are plenty of banks out there that can refinance and/or consolidate your student loans, but finding the right bank can be time consuming and frustrating. Students who need assistance covering the cost of their college education often turn to federal or private student loans to pay their tuition and fees.
Once a borrower makes their selections, they can sign off on the loan and the lender will payoff the existing loans and open a brand new loan for the customer.
When trying to make a determination whether or not it makes sense to refinance or consolidate your student loans, it is important to have a clear understanding of what you want to achieve.
Borrowers with multiple loans may simply want to consolidate so they have one payment to make each month.
Borrowers who needed a cosigner for their original loan may now be in a position to take on a loan themselves and can remove the cosigner from their financial obligation.
The best banks to refinance and consolidate student loans look at a borrower’s creditworthiness when determining whether or not to approve them for a new loan.
Most lenders will look at a borrower’s credit score and monthly income to determine if they are a good fit for the loan product they are applying for.
The best banks to refinance your student loan do not charge such fees.