Student Loan Refinance Calculator
Student debt can be overwhelming, but there are ways to help relieve the burden. One option is to refinance your student loans through a private lender. There is a common misconception that private refinancing is a bad move. That is not always the case. If you are financially stable and have a good credit score, you should look into refinancing. Using this refinance calculator will help you determine if its a good financial move.
What is Private Refinancing?
Private refinancing involves securing a new loan to pay off a current loan(s). Why would you want to take on a whole new loan? Worthwhile refinancing will get you a better interest rate and save you money over the life of your loan. The new loan may also have a shorter loan term, saving you even more on interest.
You can easily find private loan companies offering as low as 3% fixed interest rates. This is significantly lower than the current federal consolidation rates of 4-7%. It is likely significantly lower than your current weighted average interest rate as well. Plus, the fixed rate keeps monthly payments consistent.
Before You Use This Refinance Calculator
Before using this refinance calculator, you need to explore your refinancing options. See our top refinance picks. You could go off of advertised rates but getting a personal quote is better. Most refinance companies offer a quote within a few minutes of filling out an application. Set these numbers aside.
If you are refinancing multiple loans with different interest rates, use our weighted average interest rate calculator. A weighted average interest rate is more accurate than just taking your debt’s average interest rate. It considers the amount of a loan so that the 4.5% interest rate on your $20,000 has more weight than the 7% interest rate on $2,000 worth of debt.
How This Refinancing Calculator Works
Just plug your current loan balance and weighted average interest rate and your refinance loan info into the calculator and scroll up. Our calculator does the hard work for you. You will see your old loan data and new loan data side-by-side for comparison. It also instantly reveals your total interest, monthly payment, interest rate, and loan-term savings.
Is Refinancing Right for Me?
Refinancing only makes sense if it is financially beneficial to you. Consider the questions below as you look at the calculator results.
Will Refinancing Save Me Money?
The point of refinancing is to save money. Look at the savings column. Do you see a few white numbers there? If so, refinancing is going to save you money. How much it saves you depends on your situation and how quickly you plan to repay your loan.
Can I Afford the New Payment?
Refinancing may help you save money in the long run, but it can make your short run budget a little tight. Pay close attention to your new loan’s monthly payment results in the calculator. You need to be realistic about what you are able to afford each month. If you cannot afford this new monthly payment, refinancing may not be right for you.
Am I Financially Stable?
When you refinance federal loans, they become ineligible for loan forgiveness and income-driven repayment plans. Before refinancing, consider the stability of your job, other sources of income, and health.
If you answered yes to the three questions above, then refinancing is the smart financial choice. It will save you money and likely get you out of debt faster.