Graduates faced with large amounts of student loan debt have the option to refinance and pay lower amounts every month. This option helps graduates pay off student debt much easier, and have more room for other expenses.
Although student loan experts say it isn't for everyone, refinancing is one way interest rates can be lowered. Erin Lowry, author of the upcoming book "Broke Millenial," told U.S. News that it's mostly for those who are somehow established in their financial situation, and not for those who just got out of college.
Refinancing, says Lowry, is a good option for those who don't need federal student loan protections such as public service loan forgiveness. It's for those who are more financially stable, even if they're still building their careers - most likely graduates in their late 20s and 30s.
One such example of a graduate who refinanced to lower his monthly repayments is Michael Golfman, a 36-year-old University of Denver graduate. He refinanced more than $70,000 of his federal and private student loans, and because of that he was able to save about $75 a month. He says the amount he saves "justified" his getting a car.
Would you want to refinance to lower your monthly student loan debt repayments? Here are some ways to become a better candidate for refinancing, according to a report from Credible.com, a multi-lender marketplace specializing in student loans.
1) Make sure you pay off other debts before refinancing
Based on Credible's analysis, it helps if borrowers settle other debt obligations such as car loan debts, mortgage, and credit card debts before applying for refinancing. Usually, those without a lot of debt obligations get approved with lower rates.
2) Maintain good credit scores
If one has many debt obligations to pay up, then having good credit scores can help. Credible notes that maintaining your credit card balance low can help, as is having a good payment history.
3) Add a Cosigner
Adding a cosigner gives a huge boost to your chances of getting refinanced. Cosigners commit to pay off the loan when the borrower is unable to, so just make sure to make repayments faithfully lest your cosigner end up paying for your debt.
