A college degree can be expensive. For many, taking out student loans is one of the best ways to afford higher education. A federal student loan is a great finance option as it covers expenses like tuition, room and board, books, supplies, transportation costs and electronic devices. Additionally, federal loans offer flexible payment terms.
However, many find it difficult to manage student loan payments. Some borrowers may consider student loan refinancing. This is when you take out a new loan to pay off your existing student loans. Refinancing can help consolidate multiple loans or allow you to find lower interest rates.
Before you decide on refinancing federal student loans, make sure you weigh the pros and cons. Doing so comes with risks, as refinancing is only available through private lenders. You lose protections exclusive to federal borrowers when you refinance.
Learn what federal student loan refinancing is, how it works and when it’s a good idea, to determine if it’s the right option for you.