As many of you recently read in, The Scary Cost of a College Education, the cost of getting a college degree these days is completely out of control. That’s why it’s no surprise that students are coming out of school drowning in debt.
And frankly, I can’t say that I really blame them. For the most part, nobody teaches kids how to handle their money and it’s unlikely they are learning any good habits from their friends. They pretty much have to learn, not from their Alma Mater, but from the school of hard knocks and experience.
The problem is, experience is a cruel teacher, it gives the test before presenting the lesson. So kids end up loading up on tens of thousands of dollars in student loan debt before realizing what a bad idea it really is.
Here are some sobering statistics on student loan debt:
- Total Amount of Student Loan Borrowers: 43.3 million +
- Total Outstanding Student Loan Debt: $1.35 trillion +
- Average Federal Student Loan Default Rate: 11.8%
- Average Number of College Grads with Student loan Debt: 60%
- Average Debt Per Borrower: $28,400
So, 60% of kids come out of school owing money and the average amount is $28,400. That’s a lot of money, especially considering that many cannot find jobs right away.
While student loans can be a real drag, you can make things better. If you have student debt, now is the time to refinance your student loans. Why now? Here are three reasons.
Reason #1 to Refinance Your Student Loans Now
Interest rates are at historic lows and they are only going up from here. In fact, all indicators are suggesting that the U.S. Federal Reserve is going to begin raising rates in December of this year. And once they start, it’s unlikely that they are going to stop. If you are paying anywhere from 4% to 10% or more on your student loans, the time to act is now.
Interest rates make a huge difference in how much you pay over time. For example, if you have an outstanding student loan of $40,000 and are paying 10% interest, you might be able to bring that interest rate down closer to 2% and save yourself over $3,000 in interest the first year alone. Depending on your rates, some people could save upwards of $14,000 over the life of their loans. Now that’s real money!
Once interest rates start climbing next year, you are going to kick yourself for not taking the time to refinance your student loans at historically low rates while you had the chance.
Reason #2 to Refinance Your Student Loans Now
Debt is a real killer at a time when you are just getting started in life. You should be saving up an emergency fund, saving up for a house or taking some cool vacations, right? Don’t waste your early years paying more than you have to for your loans. Why flush money down the toilet on high interest rates?
You should try to get your loans paid off as quickly as possible and a lower interest rate will help you to do that even faster. Couldn’t you find something better to spend your money on?
Reason #3 to Refinance Your Student Loans Now
It’s easy! You might think that with all of the banks offering different student loan refinancing options, refinancing would be very confusing. That’s why I’d like to recommend LendEDU, it’s awesome. They aren’t a lender, but a marketplace of lenders. They help borrowers compare all of the top student loan companies in one place. That makes it easy for you and the lenders compete for your business.
With LendEDU, it is free to apply, and the process only takes about 15 minutes. How much could you save? In just 15 minutes you could have quotes from the top student loan refinance lenders in the country and you might be able to save $14,000…
I’ve actually talked to the people over at LendEDU and I trust the company. In fact, they are the only student loan refinancing company that I’ll endorse on this site.
How Does it Work?
Refinancing your loan through LendEDU is super easy. You simply click on the LendEDU link below and they will walk you through ten simple questions. After you answer the questions, LendEDU will provide you with multiple refinancing offers from the top loan refinancing companies in the country.
What about your credit score? Won’t it be hurt by having lenders checking it? Nope. LendEDU uses a “soft pull” inquiry that will not hurt your credit score in any way.
There’s also no obligation to use any of their offers. If you find a rate that works for you, that’s great. If you don’t, no harm done. LendEDU is 100% free, doesn’t affect your credit and saves you the trouble of contacting multiple lenders. What could be easier?
So, what are you waiting for? It’s time to stop procrastinating and see how much money you could save by refinancing your student loans. Interest rates are at historic lows, the savings can be huge, and it’s super easy to apply. What other reasons do you need?
Don’t forget. After you refinance your student loans, don’t squander your savings. Maybe you could use those savings to build an emergency fund, kick-up your 401k a notch, or even start saving up to buy an investment property? The sky’s the limit. The important thing is to make sure you stay focused on building your financial foundation and continuing to be net worthy!
Refinancing your student loans at today’s historically low rates seems like a no-brainer, why do you think more people don’t look into it? If you have student loans, have you looked into refinancing them?