Student Loan Refinancing

By lowering your interest rate or leveraging a better repayment term, refinancing your student loans (such as private, federal, and/or PLUS loans) could help you save money in the long run or pay them off sooner. If you refinance some or all your federal student loans⁴ into a private student loan, you will lose access to any current or future federal student loan benefits, such as potential debt forgiveness or income-driven repayment options. It’s more important than ever to evaluate your options if you have federal student loans so that you can make educated decisions.

 

For more information, check out these helpful resources:

• Visit studentaid.gov or contact your federal student loan servicer
• Read our What to Know About Student Loan Refinancing blog
• Consult with our College Planner

Yes, your co-borrower can be released from your student loans after 36 months if you (the primary borrower) meet the criteria to hold the loan on your own at that time.

A fixed rate loan is exactly as it sounds – the interest rate is fixed, or stays the same, for the entire life of your loan.

• Pros: You’ll know what your interest rate is and won’t have to worry about fluctuations down the road.

• Cons: A fixed rate can be a higher rate than a variable rate option.

 

A variable rate loan is when your interest rate will fluctuate over time based on the current index rate. There is usually a limit or “ceiling rate” on how high your rate can go if the index increases.

• Pros: Variable rate options are typically lower than fixed rate at the start of your loan. Additionally, if the index decreases in the future, so will your interest rate.
• Cons: There is risk involved; while your rate could go down, it could also increase, meaning your monthly payment could increase.

You can refinance all or some of your student loans – whichever option is best for you. Some borrowers choose not to refinance their federal student loans so they can hold on to existing benefits such as income-based repayment plans or potential loan forgiveness.

Your student loans can be refinanced if they are in grace or repayment after you’ve graduated from an approved school. If you did not graduate from the school, the loan is not eligible to be refinanced.

Yes! If you have previously refinanced some or all your student loans, you may wish to refinance to take advantage of a lower rate.

Yes, you should continue to make your payments while your application is in process. You will be notified when the funds have been sent to the applicable servicers.

All loans being refinanced must be post separation from school.

 

Private & Institutional Education Loans: 

• Undergrad
• Graduate
• Consolidation Federal

 

Education Loans²:

• Federal Family Education Loan Program (FFELP)
• Subsidized or Unsubsidized (aka Stafford Loan)
• Grad or Parent PLUS William D. Ford Direct Loan Program Subsidized or Unsubsidized (aka Direct Stafford Loan)
• William D. Ford Direct Loan Program Undergraduate, Grad or Parent PLUS
• Perkins, Nursing or Health Education Assistance (HEAL)
• Consolidation

 

If you choose to refinance a federal loan, you will lose federal student loan benefits such as income-driven repayment or loan forgiveness options that may be available on your current federal loan(s). In addition, federal student loans offer deferment and forbearance options that may not be available if you refinance into a private loan.

Consolidation means you are simply combining existing loans. Your total payment amount and total interest will likely remain the same, but you’ll have the convenience of making one payment rather than multiple payments. This type of loan is usually associated with federal government student loans.

 

When you refinance, you are taking out a single new loan to pay off your old ones. You’ll probably have a new interest rate, new term and a different monthly payment amount.

You do not need to be a member to start the application, but you will need to be a member of CommunityAmerica Credit to finalize the loan.