A study shows that around eight million students in the United States are qualified for student loans refinancing at a much lower interest rate. However, not all of these students are even aware that they can avail of this once-in-a-lifetime opportunity. As the new year starts, it is time to explore some other ways to refinance student loans.
Michael Golfman, a 36-year-old man who was originally from Colorado and moved to New York City due to work, is one of those who chose debt refinancing in order to get lower monthly payments. By refinancing and consolidating his over $70,000 student loans through student loan refinance lender Citizen's Bank, he is getting more for his loan, according to U.S. News and World Report. Refinancing may not be for everyone but it is one way to lower a student loan interest.
"Over the long haul, I'm probably saving about $4,000 to $5,000, and monthly I'm saving about $75," the University of Denver grad says. "I freed up a little money, and that justified me getting a car," he said.
The monthly payment for their loans could pose a challenge to recent graduates. But Forbes said this could be refinanced from a standard repayment term of 10 years to a longer term of up to 20 years to make it more manageable although it can result in a higher repayment cost.
Those who have higher incomes can opt to refinance their student loans with a shorter term for repayment, which could give them a bigger reduction in interest rates. As per Business Insider, there are $1.3 trillion student debts shared by borrowers who are already feeling the pinch.
Up to 4.7 million of the 44.2 million people in the United States with student debts are in default. Because of this, millennials saddled with debts have no choice but to delay some major life decisions such as starting a family or even just buying a house. Unfortunately, the student loans have held back most Americans instead of pushing them forward.
