Balancing undergraduate student loan debt is enough in and of itself, but when you throw in grad school with it things can become pretty overwhelming. The key is to make sure that you manage your undergraduate student debt early on. Some students even ask if they can refinance their student debt during graduate school. The answer is yes! Over the past few years, student loan refinancing has become a leading option for students to help cut down how much they will pay towards their loans. For those who qualify, student loan refinancing could lead to lower interest rates and saving potential.
Will You Get a Better Deal Through Refinancing?
Before making any big financial decision, it is important to make sure that you are getting a good deal. Refinancing your undergraduate loans is really only a good idea if you are going to get a better interest rate on your loans. There are several factors to consider when it comes to making sure that you are getting a better deal through refinancing, not just the interest rate. Interest rates are important because if you have a lower rate, you will ultimately pay less in the long run. You may also get a better deal by locking yourself into a lower fixed rate, rather than a variable rate offered through the federal student loan program.
Aside from interest rates, the term length is also important. If you have a longer term length, chances are you will pay a whole lot more since interest is charged at an annual percentage rate. With refinancing, you may be able to get a shorter term length. You may also be able to negotiate lower monthly payments, making it easier for you to pay down your undergrad loans while you are pursuing your graduate degree.
Is Deferment a Possibility While You are in Grad School?
When you have a federal student loan, you will have certain benefits available to you- such as the ability to defer your payments while you are still going to school. During this deferment period, you aren’t responsible for making monthly payments towards your loans. When you refinance your student loans, you may not have this ability. Some lenders do offer deferment plans for students that are still enrolled in school, and pursuing a higher degree. This is something that you will want to check into before you actually refinance the loans. You don’t want to get into a new loan without the ability to make your monthly payments.
Is Refinancing a Good Idea?
Now that you know a little bit about why student debtors choose to refinance their student loans, it is time to decide if it is the right idea for you. Going to grad school puts enough on your plate, with studying, writing assignments, and other activities related to your degree. If you are in a strenuous program, chances are you may be going to school full time and not working. If you don’t have a job, it is important that you look for a refinancing lender that does offer the deferments that we talked about. If you opt for a lender that doesn’t offer this, at least make sure that your payments are low enough that you can afford them during school.
Some lenders, however, will not refinance loans if you are taking out new loans to pay for further education. This is another thing to check into. All in all, if you can afford the monthly payment or have your payments deferred while you are in grad school, it makes sense to go ahead and refinance your current student debt. This can help you to have less interest accrued over time, helping you to save money. When you graduate from your graduate program, you will likely want to set out into the world with the right foot forward financially. Refinancing your student loans can be one of the better ways to do this. On top of that, it also looks good on your credit because it shows that you paid off your previous loans.
How to Refinance Student Debt During Grad School
Have you decided that refinancing your student debt during grad school is right for you? If so, then you will want to get started. To refinance your student loan debt while you are still enrolled in a graduate program, you will need to make sure that you have the ability to repay your loans. Good credit and a decent income is almost always required, except with lenders that do offer deferments on payments until you finish your degree.
To get started, look into some of the top student loan refinancing companies and check into their interest rate offers. Then, submit an application and wait to see if you are approved. Refinancing your student loans is actually a pretty easy and seamless process, so it shouldn’t be too much of a headache for you.
Author: Jeff Gitlen
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