Refinancing

• According to the financial website 360 Financial Literacy, students and graduates with student loan debt can refinance these loans under a variety of programs. In addition, the site notes that many graduates have a number of government and private student loans, and these loans often carry considerably different terms. To refinance these loans into one account with a single interest rate and one monthly payment, borrowers can refinance the multiple accounts under one consolidation loan. According to 360 Financial Literacy, both federal and private refinance and consolidation loan programs are available.
  
  

Types

• Student loan debtors can select from an array of refinancing options, according to 360 Financial Literacy. These programs include a selection of repayment options that include a standard fixed repayment rate, income-sensitive loans with payments that increase as the debtor's income increases and graduated programs that offer payments that increase at predefined intervals throughout the life of the loan. The official website of the Stafford Loan program explains that debtors can apply for refinance or consolidation loans online. The financial institution Wells Fargo points out that many private lenders accept either online or in-person applications.
  
  

Benefits

• The Stafford Loan website explains that those who refinance or consolidate student loans typically make lower monthly payments; these payments are often the result of lower interest rates. The reduced interest and lower monthly payments can lead to an annual savings of hundreds or even thousands of dollars, according to the Student Loan Consolidator website. More affordable monthly payments can help maintain or improve credit scores for those who could not otherwise afford their loan payments. Stafford Loan also notes that certain refinancing programs allow former students to lock in interest rates for the life of the loan, reducing the likelihood that future rate fluctuations will increase the cost of the debt.
  
  

Considerations

• Although refinancing and consolidating student loans carry a number of benefits, former students should know that extending the repayment period of student loans, sometimes up to 30 years, according to 360 Financial Literacy, can make the debt more expensive and counter the benefits of a lower interest rate. Those who take out private consolidation loans should also be aware of prepayment penalties, according to the Student Loan Consolidator. Private refinancing loans may not offer the same deferment and forbearance options as federal loans. Also, certain refinance or consolidation loans may not qualify for student-loan tax benefits.