With the New Year just around the corner, it's a time of year when many Americans will be planning their resolutions for 2017. You might not be able to keep to that new dieting regime or to drop those extra pounds, but turning your attention to your personal finances can be a good step for the future. If you have a private student loan, taking advantage of low interest rates now could offer significant savings.
Although managing your finances can take some serious discipline, there are several actions you can take once, without needing to revisit them for some time. Switching a loan to a lower interest rate is one of these actions and doing it at the right time could save you a lot of money. The Federal Reserve recently raised interest rates, but they are still lower than they were at the peak of the recession and the sooner you refinance, the less your new rates will be affected by the Fed's rate increase.
If you have good credit, there may be a variety of lower interest rates available to you for your education debt. Switching your private student loan to a plan with cheaper rates is a no-brainer. Refinancing a federal student loan, however, there are a few more things to consider, particularly because these loans come with some good protection, like generous deferment options and income-based repayment plans. If you a solid job, you might want to take the gamble to pay off your federal student debt quicker. Alternatively, any cash you save from switching other private loans can be put towards your federal loans to pay them down faster.
The New Year can be a great time to reassess your finances. By taking care of student debt, you can set yourself up for a more stable financial future.
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