myfedloan consolidation
-
Choosing to use a myfedloan with a private lender to refinance your debt is a high-risk decision. If all goes well, you'll reduce your interest costs significantly and repay your loan faster. It may even free up money every month.
-
The risk is that unemployment or lower wages will prevent you from making your payments. While federal loans have safeguards such as income-tested repayment plans, private lenders are much less tolerant.
-
Myfedloan's role in refinancing private student loans is minimal. Because Myfedloan does not provide refinancing services, most of the work of refinancing the loan is done by the new lender.
-
The new lender will determine the final repayment of the loan at Fedloan Servicing and then cut the check. Myfedloan is not required to comment on a borrower's ability to refinance, and there are no penalties for early repayment of federal student loans.
-
There are two keys to the private refinancing process. First, it is important to determine if it is a good idea or not. If repayment is difficult, borrowers are better off living with higher interest rates on federal loans. Second, getting lender approval for the refinance process can be a problem for borrowers with less than ideal credit or low income relative to their debt.
-
The good news is that there are currently 18 different companies offering refinancing services.
-
Finally, it is important to remember that, like federal consolidation, private refinancing cannot be eliminated. Once the mifedlon loans are fully paid off, there is no going back to your old lender.