The Top Three Times To Refinance Student Loans

If you’re making payments on private or federal student loans, or a combination of both, you may have considered refinancing or consolidating them. There can be numerous advantages, but when is the right time to refinance?

You generally need to be in a grace or repayment period on one or more student loans after graduation or separation from school in order to refinance. Read on for a few specific opportunities to consider once you’ve reached that point.

When interest rates are lower than your existing rate(s).

• Rates are currently at historic lows, so you may want to lock in a better interest rate before they go up again. Check the rates on your current loans, as well as whether you have a fixed or variable rate. Many sites offer calculators to help determine what your savings could be long term. You can access ours online here.

When you want to shorten or lengthen the amount of time you’ll be making payments.

• Extending your repayment terms can lower your monthly required payment (though you’ll still be paying interest for the life of the loan and could pay more out of pocket in the long run). Alternatively, you could choose a shorter repayment term to pay off your loans sooner, though this may also be possible if you make more than your minimum monthly payment on a current loan (assuming there are no pre-payment penalties).

When you want all your student loans under your own name.

• Students often do not have the credit history necessary to qualify for a loan on their own. A co-borrower may sign for the loan, or a parent may take out a federal Parent PLUS loan in their own name. If your current loan doesn’t have a co-borrower release option, refinancing and consolidating your loans is one way to get all your student loans under your name and credit history.

Additional Considerations

UMassFive is offering you the ability to refinance and enjoy no payments and no interest for three months¹, plus get $250 back²! To learn more about this promotion click here.

It’s important to remember that every student loan situation is unique. There are many factors to consider when refinancing student loans, including a possible loss of loan benefits for any federal student loans you currently hold. In addition, the CARES Act was passed in response to events related to the COVID-19 pandemic and includes broad relief measures for federal student loan borrowers, which are set to expire after May 1, 2022. If you are considering refinancing your federal student loans, please make sure to review these measures to understand your options. 

Did You Know? The Federal Government's pause on student loan payments ends May 1, 2022.

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¹ To qualify, the loan application must be started between 1/3/2022 and 4/3/2022 and the selected repayment term must be 10 years or less. Upon disbursement of your refinance loan, no payments will be required and no interest will accrue during a three-month promotional period. After this three-month promotional period ends, this loan requires full payments of principal and interest. The credit union reserves the right to modify the terms of this offer at any point in the future for new applications. ² To qualify, the loan application must be started between 1/3/2022 and 1/31/2022. Upon approval and disbursement of your refinance loan, the primary borrower will receive a cash deposit of $250. The cash deposit will be awarded in the form of a deposit to your credit union checking or savings account within 90 business days from the funding date of the loan. The primary borrower must be a credit union member in good standing at the time of deposit. Limit one cash award per borrower. The credit union reserves the right to modify the terms of this offer at any point in the future for new applications. Recipient is responsible for any applicable federal, state, or local taxes associated with receiving the cash deposit; consult your tax advisor to determine applicable tax consequences.