How to Choose Between Banks When Refinancing a Student Loan

When refinancing a student loan, one typically has a choice between private lenders, whether they be small local banks, credit unions or large multi-national banking conglomerates.  Though the rates may be very similar, you can be certain that many of the particulars of the loan differ, from customer service to the rate schedules offered those doing refinancing.  Student loans are one of the most common refinances (after home mortgages), especially in areas with high rates of college educated residents, such as Atlanta or Minneapolis.  In such places, there are sure to be plenty of refinance options to choose from.

Firstly, when looking into refinancing a student loan, you'll want to first consider the market basics such as the current interest rate, the last several year trend of interst rates, and whether you'll select a fixed or adjustable rate loan.  Assuming you go with the former when refinancing, student loans are also often consolidated into a single payment at a lower, fixed rate when the prime rate drops well below the government subsidized rate that existed when the original loans were taken.

Even if you're experienced with refinancing student loans, an increased merger rate and a competitive banking climate encourage regular changes to bank policies.  To be sure you get the very best rate and services, you should plan on talking to at least three different banks that differ as much as possible (unless you have an established preference).

It could take awhile.  In fact, you should plan on spending at least a few months so you take your time when considering banks.  And yes, this does mean you'll need to read the fine print – many times over, in fact.  Deadly dull as it may seem, the real differences seem to emerge when you bother to do the reading yourself, rather than relying upon a bank representative to spell it out for you.  When refinancing a student loan, you should consider anyone working for a bank as a salesperson.

It's good to know how you'll be treated by a given lending institution.  It is often a good idea to inquire about such customer service and any possible predatory practices from anyone you know who has recently gone the route of refinancing.  Student loans services are very lucrative, so you should expect to be treated accordingly.

Check very carefully into any fees that may be charged for the refinance, either by the original lending institution or the bank doing the current refinancing.  Student loan programs sometimes charge an early repayment fee, and there may be charges pertaining to the investigations into you that the bank makes.  Don't suffer any ridiculous fees – shop around!  Refinancing a student loan is supposed to save you money.

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