If you have student loans, this one's for you! At 18 most of us took out loans that we might not have understood, but it's never too late to learn. Whether you are a veteran nurse, a new grad nurse or a nursing student who just took out your first loan, learning more about your student loans is important!
Everyone always talks about refinancing student loans, but what does that mean? Refinancing means taking out a new loan with a lower interest rate.
There are a few things to look at prior to refinancing any loans.
First, look at whether your loan is a private loan or federal loan. Federal loans come with benefits like the public service loan forgiveness program. Public service loan forgiveness is a program you may be eligible for if you have federal student loans and work for a non profit hospital. Its important to keep in mind that private loans are not eligible for loan forgiveness or income driven repayment plan so, once you refinance from a federal loan to a private loan, you will lose those benefits.( The public service loan forgiveness program will be discussed in depth in a future blog post).
Income driven repayment plans were started to provide affordable repayment plans. Every year, you are required to submit your income to the student loan provider and your payment is based on your income and family size.
Next you want to look at what your current interest rate is and compare that to the rates that are available. Right now interest rates are much higher than they have previously been, so now might not be the best time to refinance. Two things to note with interest rates are fixed interest vs variable interest rates. Fixed interest rates do not change, while variable interest rates will fluctuate with the national interest rates. This means that you may have a low interest rate for a while and you have the chance for it to increase.
You also want to look at your minimum monthly payment. If you have a private student loan with a high interest rate and large payment, refinancing may be beneficial and save you money.
Last, you'll want to know your credit score. If you have a low credit score or have a lot of debt, you will have a hard time being approved for a new loan and a better interest rate. You can check your credit score with credit karma, experian or equifax.
Whether you decide to refinance or not, knowing all of your options and finding the best plan to repay your loans is so empowering. You can make this process way easier by connecting your student loans and refinancing within the NurseWallet app. NurseWallet shows you all of your repayment options and allows you to choose a plan that best matches with your goals!
Refinancing your loans can be beneficial
Know your credit score and your interest rates
You are the only one who can decide what option is right for you!