Bank like a financial pro with the Alliant mobile app. Make payments, deposit checks, manage cards and so much more.
Renovate your kitchen, pay off high-interest debt, or have access to emergency funds when you need it with an Alliant Home Equity Line of Credit.
Browse new and used vehicle inventory, and qualify for a rate discount when you buy!81
Separate each of your savings goals into an Alliant Supplemental Savings Account so you can visualize your progress.
By Tracey Scott
Borrowers often refinance student loans for two main reasons: 1) lower monthly payments and 2) cost savings. Loan interest rates and term length play a significant role in determining which lender to choose based on a borrower’s financial goals. And it can get a bit complicated when adding federal student loans into the mix. Whether you have undergraduate or graduate school student loans, knowing the pros and cons can help you decide if refinancing your student loans is right for you.
You could use a student loan refinance to pay off both federal and private student loans. A refinance creates a new loan, which may or may not be with your current lender. It will likely have a different interest rate and payment terms from your prior loans.
A student loan refinance could consolidate multiple federal student loans and your private loan into one new loan. It’s easier to track payments and avoid late or missed payments since you only make one monthly payment.
Repayment terms as short as five years are available. The shorter the term, the higher your monthly payment but the more money you’re likely to save in interest versus a loan with a longer term. If you anticipate an increased income or ability to pay off your loan quickly, then consider refinancing all of your education loans at a lower interest rate and with a shorter term.
Repayment terms of up to 20 years are available which may increase the total cost of the loan but will also keep your monthly payments low.
Income-based repayment plans and loan forgiveness options are unique to federal student loan programs and may be lost if you refinance these loans. Borrowers on a graduated repayment plan or those eligible for loan forgiveness may want to weigh their options carefully.
Private student loans are credit-based. Generally, you should have a steady income and good credit or the ability to obtain a cosigner who does. Fortunately, student loan refinance applications are quick, easy and free. Qualifications for a student loan typically include credit, employment stability (6 plus months with current employer) and income (at least $40,000 per year).
If you don’t meet income or credit history requirements for a student loan refinance or if you’d like to see if you can obtain a better interest rate than the one offered to you, consider using a cosigner.
A family member or friend can act as the cosigner on the loan and may help you qualify since their income and credit history may now be factored into the approval decision. Even if you are eligible for a student loan refinance on your own, a cosigner with a higher credit score or income may help you obtain a lower interest rate.
Get even more personal finance info, tips and tricks delivered right to your inbox each month.
Thanks for subscribing to Alliant's Money Mentor newsletter! You will now receive personal finance tips in your email inbox each month.
You are leaving Alliant’s website to enter a website hosted by an organization separate from Alliant Credit Union. The products and services on this website are being offered through LPL Financial or its affiliates, which are separate entities from, and not affiliates of, Alliant Credit Union.The privacy and security policies of the site may differ from those of Alliant Credit Union.
You are leaving an Alliant Credit Union website and are about to enter a website operated by a third-party, independent from Alliant Credit Union. Alliant Credit Union does not manage the operation or content of the website you are about to enter. Alliant Credit Union is not responsible for the content and does not provide any products or services at this third-party website. The privacy and security policies of the site may differ from those of Alliant Credit Union.