Why You Shouldn’t Wait to Refinance Your Student Loans

June 27, 20220

Why you shouldn’t wait to refinance your student loans


If you graduated from college between 2010 and 2016, you’re among the generation that owes the most student loan debt in history. The average debt burden for a recent graduate is $37,172—and that number has increased consistently over the past decade.

If you haven’t considered refinancing your student loans yet, now may be a good time. We’ve got four reasons why refinance should be a top priority for borrowers looking to get out of debt sooner, better manage their cash flow, and improve their financial situation overall:

Here are four reasons why you should pull the trigger on your student loan refinance ASAP.

  • Interest rates are on the rise. If you’ve been holding off on refinancing your student loans, we’re going to assume it’s because you’re worried about taking on more debt if interest rates climb. But that’s a short-sighted way of looking at things. The reality is that interest rates are only going up—and they’ll probably climb significantly in 2019 and 2020 as inflation creeps higher and the Fed raises rates yet again. Refinancing now can save you hundreds or even thousands of dollars over the life of your loan, which means you could end up paying less than if you’d waited until later this year or next year before doing so.
  • You’ve already made progress with debt repayment. If you’ve set aside some money each month toward paying off your student loans, then it’s likely that some progress has been made in terms of reducing them (even if only slightly). That progress won’t be lost by refinancing; instead, refinancing lets borrowers pay off their debt sooner while saving money along the way. So rather than seeing yourself as further away from getting rid of those debts altogether when interest rates rise again, take advantage while they’re still low!
  • You have more options than ever before (and there may not be another chance). Since 2010 there have been significant changes in how people can refinance their student loans: changes such as income-driven repayment plans available through both federal programs like Income-Based Repayment (IBR) and income-contingent repayment plans offered through private lenders like SoFi; changes such as new rules requiring all federal borrowers who want to consolidate their loans into one payment stream must first repay any outstanding balances on those loans before consolidating them into one stream; changes such as restrictions placed on private lenders offering such benefits due to concerns over risk management practices by lenders themselves…the list goes on! With all these changes that have taken place since 2010 it has become easier than ever before

1. You could save a ton of money.

There are many ways that refinancing your student loans can help you save money. First of all, you could end up paying off your loans sooner and possibly even at a lower interest rate than before. This will reduce the amount of interest that accrues on each payment and also allow for a smaller monthly payment.

Additionally, refinancing to a variable rate may be beneficial if the market rate is low at the time of your loan’s maturity date since you can then refinance again into another fixed-rate option when rates go back up in order to lock in those lower rates for as long as possible.

2. Interest rates are on the rise.

  • Interest rates are on the rise.
  • Student loan interest rates are rising faster than other types of loans.
  • The Fed’s benchmark rate is only a quarter-point, but that’s still more than double what it was just two years ago!

3. There are a lot of reasons to be optimistic.

There are a lot of reasons to be optimistic about the economy, not just for student loan borrowers but for everyone. The unemployment rate is at a historic low, and even more importantly, it’s been steadily declining since 2010. That means there are more jobs available and fewer people looking for work than during any other time in recent memory. Meanwhile, stocks are near all-time highs with the Dow Jones Industrial Average reaching 23,000 points earlier this year—a record high at the time of writing this article—and rising yet again after that milestone was reached.

This is good news for everyone who has money invested in the stock market or who wants to invest their money but hasn’t yet done so because they were waiting for signs that it was safe enough to do so (i.e., whether or not what you were investing in would be stable). But if you have student loans and are struggling under their burden as well as other debts like credit cards and medical bills then these trends may seem less than exciting because they don’t impact your situation immediately; however long-term investments such as buying stocks now will pay off later when your loans come due again when interest rates rise significantly higher than today’s low levels

4. You’ve already made progress with debt repayment.

You’ve already made progress. If you started making payments on your student loans in the past year or two, there’s no reason to think that you can’t continue to do so. If you have a job and are making regular payments, it shows a commitment to paying off your debt and could convince lenders that giving you more money would be worthwhile. Most importantly, if you’ve already been paying down some of your principal balance on the loan and continue doing so after refinancing—this is especially true if it results in lower payments—then lenders will see this as an indicator of responsible behavior that makes them more confident in the decision they made when they approved your application for refinancing.

Refinancing your student loans can help you pay them off faster, and this is especially true if you refinanced in 2018, before interest rates went up.

Refinancing your student loans can help you pay them off faster, and this is especially true if you refinanced in 2018, before interest rates went up.

  • Refinancing can save you money. If your current lender has a variable interest rate, it might be worth refinancing since the new lender will likely offer lower fixed rates for life. You could save hundreds or thousands of dollars over time by taking advantage of this opportunity.
  • Refinancing can get you a better interest rate on all or some of your student loans. Many lenders offer different rates depending on how much debt they’re refinancing and other factors like credit score; so check out multiple lenders’ offers before choosing one!
  • Refinancing can also get you a lower monthly payment than what’s possible with many federal repayment plans (like Income-Based Repayment). This could help keep more cash in your pocket each month which may make things easier when it comes to paying bills or saving for retirement or other financial goals!


There are a lot of factors to consider when deciding whether or not to refinance student loans. It’s a difficult decision that can feel overwhelming because there’s so much information out there and it can be hard to know where to start. But if you’re willing to do your research, you will find that refinancing is an option worth exploring for many people who want more control over how they pay off their debt.