We receive advertising fees from the brands we review that affect the ranking and scoring of such brands.
Advertiser Disclosure
This website is an informative comparison site that aims to offer its users find helpful information regarding the products and offers that will be suitable for their needs. We are able to maintain a free, high-quality service by receiving advertising fees from the brands and service providers we review on this website (though we may also review brands we are not engaged with). These advertising fees, combined with our criteria and methodology, such as the conversion rates, our team of reviewer's finding and subjective experience and product popularity, impact the placement and position of the brands within the comparison table. In the event rating or scoring are assigned by us, they are based on the position in the comparison table, or according to other formula in the event specifically detailed by us. See our How we Rate page and Terms of Use for information. The reviews, rating and scoring are provided “as-is” without guaranties or warranties regarding the information contained in our website, which shall not be considered as endorsement. We make the best efforts to keep the information up-to-date, however, an offer’s terms might change at any time. We do not compare or include all service providers, brands and offers available in the market.
close
Compare Tools Blog
search

When To Reconsider Student Loan Refinancing

lendstart
Lendstart Updated: May 18, 2023 • 2 min read
table of content

Table of Content
There is more to student loan refinance than just lowering your monthly payments. Refinancing a current student loan means that you’ll have to sign with a private lender. If you take out a private loan, you’ll no longer have the advantages that go with federal student loans.  Here’s what you’ll give up when you go through a student loan refinance and pay off your federal student loans with a private loan: 
  • Loan forgiveness: The Teacher Loan Forgiveness and Public Service Loan Forgiveness programs allow you to have your student loan debt forgiven after you make a set number of on-time payments. With a private loan, you won’t have this option. (Read more)
  • Forbearance and deferment: If you experience financial hardship, you can put off making monthly federal student loan payments through forbearance or deferment. Depending on the lender, your private student loan may not offer these two benefits. 
  • Income-driven repayment (IDR): When you refinance student loans, you won’t be able to enroll in IDR plans that allow you to make a monthly payment that’s equivalent to a portion of your discretionary income. If you complete the student loan refinance process and pay off your outstanding student loans with a single private loan, you won’t be able to reverse the process. 
Given the above, some people may choose not to refinance their federal student loans. Nevertheless, refinancing a student loan can be beneficial in many ways:
  • It helps you save money on interest and monthly payments
  • It allows for more flexible repayment options
  • It allows you to convert your federal loans into private ones, which may result in lower interest rates
  • It allows you to consolidate all your existing loans into one, which may be more convenient
  • It can help you avoid defaulting on your loans

Summing it up

A federal student loan has some benefits over a private loan. Nonetheless, there are some other benefits that can be taken advantage of when refinancing with a private lender. Whichever your choice may be, it is always important to conduct research and see which lender fits your needs best. In any case, before making a financial decision that may have a long lasting impact on your life, it is important to weigh your options and see which benefits you the most. 

Article Topics

checkmark.svg Student Loans
lendstart
Written by Lendstart facebook-icon instagram-icon linkedin-icon twitter-icon

Lendstart aims to simplify complicated topics in the personal finance field. Gain insight from our thought leaders, seasoned industry experts, who strive to provide timely and practical information on current market trends.