There may come a time when you want to refinance your student loans. It can be a smart thing to do, since you can get a lower interest, a different repayment schedule or lower your monthly payments. Lenders like Sallie Mae offer student loans with interest rates and payment terms for students, but there may come a time when you feel the pinch of making payments and want to refinance. However, you need to think carefully about it to decide if it’s the right choice for you. What’s good for others may not be good for you. If you are thinking about refinancing your student loan, here are 7 questions you need to ask yourself. 

What Do I Want To Pay Every Month?

This is most likely the primary factor to refinancing. You want to make lower payments on a monthly basis so it’s an easier burden on your budget. The longer the repayment schedule means you can have that lower monthly payment. However you will have the loan for a longer period. You can also refinance to have a shorter repayment schedule. You can get out of debt faster, and have a lower interest rate. However, you will have higher monthly payments. 

What Interest Rates Are Available?

If you have a high interest rate, then you can refinance your student loan to get a better one. However, pay attention to what the current interest rate is. You may end up with a higher one. That said, you can shop around, and may be able to get a lower interest rate. The higher your rate is, the more likely you are to get a lower one, however you need to have good credit and meet the requirements of the lender. You can save a lot of money by getting a lower interest rate, so it might be worth pursuing. 

Is My Credit History Good Enough?

You will need good credit to be able to refinance and get a good interest rate and payment terms. As such, the rate you are offered will be a reflection of your credit score. It’s often a good idea to monitor your credit score so you can have a good sense of where things stand. You may be able to get a soft credit check from some lenders. This is a credit check that doesn’t lower your credit score, like a hard check would. 

What Do I Have To Pay Off?

Also take into account how much your payoff amount is. That is the amount that you’d have to pay to clear your loans completely. This amount will be higher than what you see on your statement as it will include interest and any fees. This figure is important. You will take that number along with the numbers of any other loans you have to get how much you will refinance. Refinancing your student loans means changing your interest range and your loan terms. You’ll have to ensure that you can manage the payments and that their payoff amount is lower than what you currently have. 

Do I Have Federal Loans?

If you’re having trouble with your loan arrangements, then you might think it’s a good idea to refinance. However, if you have federal loans that would not be a good idea. Refinancing a Sallie Mae student loan is one thing, while refinancing a federal loan is something else entirely. The reason for this is you will lose privileges from the federal loan. Refinancing a student loan means that a private lender gives you the funds to pay off your federal loans. 

Federal loans have a wide range of repayment options to help you out. There are income related choices like loan deferment or forbearance. You can also even get your loan forgiven in some cases. Before you try and refinance, you should look into those options. Always try to keep your federal loans and make the payments so that you can keep those protections. 

Is a Cosigner Necessary? 

There is always the chance that you will get rejected for refinancing. This is because you have a low credit score or you don’t have enough of a credit history. However, that isn’t the end of the story. You can always get a cosigner who has a good credit score. If their credit score is good enough, then you can get refinancing at a good rate. Even if your credit score is good, you may want a cosigner and get a better rate than you otherwise would have. 

How Reputable Is The Lender?

You might be relatively happy after being able to refinance your student loan. However, you should always do the research to find out if the lender is reputable. They may practice predatory lending practices or use underhanded tactics. For example, you may end up with a good rate, but if you’re late by a day your interest rate skyrockets. Be careful, and always check the fine print. 

Life happens, and while Sallie Mae develops products for students and those who have recently graduated, you could find yourself wanting to refinance your loan if you are having trouble keeping up. Ask yourself these questions first before making your decision.