If you have an AES student loan (or loans), you've probably wondered how to get a lower interest rate. The bad news: AES will not your lower your interest rate, even if you call and beg.
But there's good news, too. You can refinance your AES student loan through a private lender. Doing so can yield you a lower monthly payment or massive savings over the life of your loan. Let's talk about the steps you need to take to refinance your AES student loan.
First, a bit of background on what refinancing is and how to figure out if it's the right choice for you.
What is refinancing?
When you refinance your student loans, you choose a new lender to service your loans. That lender purchases your old loans and creates a new loan agreement with you — with new terms and a new, lower interest rate.
That lower interest rate can save you some serious cash. In fact, the average borrower who refinances saves over $250 a month and more than $16,000 over the life of the loan.
See also: The 7 Biggest Misconceptions about Student Loan Refinancing
What are the benefits of refinancing?
Only you can say whether you should refinance, but refinancing does have some big benefits:
- The significant cost savings of a lower interest rate
- The ability to consolidate multiple loans into one so that you're only responsible for making a single payment
- The option to further reduce your interest rate by signing up for automatic payments, and
- The flexibility to choose among a variety of repayment terms and find the one that best suits your needs.
See also: Quiz: Should You Refinance Your Student Loans?
Can you refinance federal student loans?
You can refinance federal student loans, but refinancing is only available through private lenders.
If you're counting on federal benefits — like income-driven repayment programs or the Public Service Loan Forgiveness Program — then you may want to consider federal loan consolidation instead.
Consolidating all your loans into one through the Direct Consolidation Loan Program will result in a single monthly payment, but it will not reduce your interest rate. You will technically get a different interest rate, but it will simply be the weighted average of your current interest rates rounded up to the nearest 1/8th percent.
If you don't need the federal loan benefits and you're looking to save some money, then you can absolutely refinance your federal student loans with a private lender. In fact, if you have both federal and private loans, you can save time and money by refinancing them all together.
See also: If Your Credit Score is Over 700, There's Something Your Student Loan Lender Doesn't Want You to Know
Where to find the best deals on student loan refinancing
Shopping around for a lender can feel intimidating, so we've done some of the leg work for you. We researched the best interest rates from the most credible and innovative lenders in the industry. See our picks for the best banks for student loan refinancing.
Once you've chosen a few to compare, ask these questions:
1. How much will their interest rate save you?
Most lenders have a refinancing calculator from most lenders online to help you calculate your savings. To save time, use ours, where you can compare rates from several lenders all in one place.
2. What perks do they offer?
Competition among lenders results in some pretty great benefits for borrowers. You could have the option to:
- Change your payment term if you need or want to — for instance, to pay your loan off faster or to reduce your monthly payment
- Release a cosigner once you meet the requirements, and
- Make interest-only payments on your loans in certain situations .
3. Do they have any discounts?
The purpose of refinancing is to save money, so find out whether they offer any special discounts. For instance, while most lenders will knock 0.25% off your interest rate for automatic payments, Citizens One will reduce your interest rate by another 0.25% if you sign up for a bank account with them.
4. What's special about them?
Many lenders are now moving beyond the lending process to make positive impacts in their borrowers' lives, their communities, and around the globe.
Some examples:
- LendKey connects you with over 13,000 community banks and credit unions so you can find the best rate while supporting local businesses.
- SoFi provides access to a community of other career-minded folks and specific programs for entrepreneurs.
- CommonBond is committed to giving back to the world around them.
5. How is their customer service?
At some point in every consumer relationship, you have a question. Will you be able to talk to someone on the phone? Read reviews online and consider giving the lender a call to get a sense of their service.
6. Do they charge fees?
You should be able to refinance for free with any reputable lender. Steer clear of lenders that require an origination fee.
So how much could you save on your AES student loans by refinancing? Find out if you're Refi Ready.
