Q: I have taken out several private student loans for college and am now in the stage of repayment. A few of the loans have higher interest rates than others, so I was wondering what all of my options are to refinance private student loans?

A: If you are looking to refinance your private student loans you do have a few options. The first option would be to obtain a consolidation loan. A consolidation loan would essentially combine all of your current private student loans into a new private consolidation loan (at a new rate and new terms, if you qualify). The rate on your new consolidation loan may (or may not) be better than your loans current interest rates. There are a few private student loan lenders who are willing to do consolidation loans. You may want to first check with the lender who you have your private student loans with to see if they offer consolidation loans. Keep in mind that there are “pros and cons” to student loan consolidation, since you are extending the repayment term, your monthly payments will be reduced, but you will possibly end up paying more over the lifetime of the loan.

Second, you could simply try to contact the lender that you have your private student loans with and see if they are willing to lower the interest rate. Trying to refinance private student loans can be difficult since the options are limited, but sometimes lenders are willing to work with their borrowers.

Lastly, if you are homeowner you could look into using a home equity loan. Since home equity loans and (some) private student loans have similar interest rates, you could consider using a home equity loan to pay off your private student loans. Even if you could not get a reduced rate (in comparison to your private student loans) on the home equity loan, it may still be worth it if the home equity loan is fixed rate and your private student loans are variable rate. This would at least lock you into the current interest rate.

TheStudentLoanShark:
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Tags: consolidation / private student loans / student loan debt / student loans

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