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You did it. You sent your kids to college.
We know that’s no small feat. You should be proud not just of their achievements, but yours as well. Because even if you started saving for their education before your first ultrasound, there’s still a good chance you took out loans to cover the cost of tuition, books, and all the other incidentals of college.
Now that the kids are out of the house, it’s time to focus on your goals again. That means taking a look at your budget and thinking of ways you can lower your overall debt.
One option? Refinance the student loans you took out for your kids.
Refinancing student loans is nothing new. It’s a smart way to potentially free up money by combining multiple loans, lowering monthly payments, or reducing interest rates. Some lenders offer special benefits for parents not available with other education refinance loans, like immediate refinancing even when the students are still in school.
So, why refinance? Consider these three perks.
If you took out a loan at a high interest rate, refinancing could help you lower it. You may have taken out a federal Parent PLUS loan and not realized you had other options. Parent PLUS loans tend to have a higher interest rate than other loan options. They are set by the government and not based on your credit. Refinancing to a lower rate could save you money over the life of the loan. However, refinancing government loans could mean losing some benefits, so be sure to get all the facts to find out which option is most beneficial for you.
You could also extend the term or length of your loan to free up money in your budget today. Your repayment would be over a longer period of time but you’d have a lower monthly payment. Then you could put extra money toward retirement each month or save more for other life goals, from renovating your home to a dream vacation.
Note: Extending the terms could result in paying more over the life of the loan, so be sure to review the impact this could have to your long-term goals.
Keeping track of bills can be complicated. Refinancing could add more “simple” to your life, especially if you have more than one child. You can combine more than one child’s student loans by refinancing them all into one new loan with one monthly payment. That way there’s less to keep track of, which helps you hold onto some sanity.
Are you a co-signer on your kid’s student loans? You could refinance to remove your child from the loan. This will move the debt to you, so your child is in the clear and able to take out other loans or improve their debt-to-income ratio for big purchases like their first home.
Unlike other refinancing options, some lenders allow parents to refinance immediately. There’s no required number of payments on your current loans or a waiting period after graduation. That means you don’t even have to wait until first semester is over to see if you can qualify for a better rate or change your term.
Refinancing student loans isn’t for everyone. But if you qualify, it could be a smart option with some exclusive benefits for parents, helping free up funds that can be used toward your other goals.
Want to learn more about refinancing the student loans you took out for your kids? Learn more about Education Refinance Loans for Parents.
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