If you have Mohela student loans, you may be interested in lowering your monthly payments or reducing what you pay overall. If so, refinancing may be a smart option.
Refinancing is actually pretty simple — believe it or not, you can actually complete the entire process in less than 30 minutes. You can refinance your Mohela student loans with a few steps:
- researching lenders
- choosing a lender, and
- filling out an application.
Let's talk about what you need to know before you take the plunge and then discuss exactly what you need to do next.
What is student loan refinancing?
When you refinance your student loans, you get a clean slate in terms of your interest rate and repayment term. How? You work with a new lender, who takes responsibility for your old loans and provides you new loan terms based on things like your income, credit score, and repayment history.
For most borrowers, refinancing provides an opportunity for a significant interest rate reduction. And that lower interest rate translates into serious cost savings. In fact, the average borrower who refinances saves more than $250 a month and over $16,000 during the life of the loan.
See also: Everything You Need to Know About Student Loan Refinancing
What are the benefits of refinancing your student loans?
Of course, the biggest reason to refinance your student loans is the serious cost savings, but there are additional benefits worth mentioning:
- Paying a single monthly bill. When you refinance, you also consolidate all the loans you're refinancing into a single loan.
- Getting discounts. Many lenders offer discounts, like an interest rate reduction of for signing up for automatic payments.
- Changing your loan term. Refinancing provides you the opportunity to extend your loan term for lower monthly payments or shorten it so that you pay less over the life of the loan.
See also: The 7 Biggest Misconceptions about Student Loan Refinancing
Can you refinance federal student loans?
Yes, you can refinance your federal student loans, just not with your federal student loan servicer. That's because federal student loans are offered at rates set by the U.S. Department of Education.
However, you can refinance student loans through a private lender.
But before you do that, it's important to think about whether you're relying on federal loan benefits like income-based repayment or loan forgiveness. If so, you would lose eligibility for those programs if you refinanced with a private lender.
See also: What is Direct Loan Consolidation for Federal Student Loans?
Many federal borrowers aren't eligible for or don't plan to take advantage of federal loan benefits, and those borrowers are good candidates for refinancing — and the cost savings that come with it.
Plus, if you have both private and federal loans, you can refinance those together with a single private lender.
Where to find the best deals on student loan refinancing?
If you're going to refinance your student loans, then you definitely want to be sure you're getting the best deal for you. Fortunately, we've created a list of the best banks for student loan financing — these are well-established and innovative lenders with the best interest rates.
As you compare lenders, here are some questions to ask:
How much money will their interest rate save you?
Use a refinancing calculator. Most lenders have one on their website — and so do we.
Do they offer discounts?
Even seemingly small interest rate reductions can save you big over the long haul. Most lenders will reduce your interest rate by 0.25% if you sign up for automatic payments. Some provide additional reductions. For instance, Citizens One knocks another 0.25% off if you have a bank account with them.
Do they provide perks?
Every lender provides their own particular package, along with useful perks. Find out which are especially valuable for you — like the ability to refinance while you're still in school, release a cosigner down the road, or change your repayment term after refinancing.
How is their customer service?
Is it important to you to talk to a human being on the phone when you have a question? Do you prefer to have access to a chat function on the website? Read user reviews online and find out whether their customer service works for you.
Do they charge fees?
Reputable lenders provide refinancing free of charge. An origination fee from a lender should be a red flag.
Do they have that special something?
If you need a tie breaker, consider the details of each lender. For instance, Splash Financial has special programs for doctors and medical residents; Common Bond contributes to a child's education for every loan they fund; and SoFi provides networking opportunities for its borrowers.
Ready to see how much you could save by refinancing? Use our calculator to find out.
