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For an overwhelming number of young professionals, the topic of student debt is a sensitive one.
With some federal loan rates as high as 7.9 percent, it does not take much to entice my fellow millennials, especially the older ones, into an emotional discourse on the subject.
You may be able to consolidate your federal student loans, which involves combining most or all of your federal loans into one new Federal Direct Consolidation Loan.
You'll have one payment each month and one interest rate that's based on your current loans' rates.
Federal loans offer their borrowers a myriad of repayment plans to choose from and the ability to switch between plans at any time.
However, private lenders (not the federal government) refinance student loans and your new interest rate depends on the market rates and your financial profile.
It is important to remember that eligibility for refinancing is based on your financial health and is determined through financial underwriting.
After all, financial technology companies and institutions alike will want to understand your financial situation so they can determine what new rate, if any, you are eligible for.
Therefore, if you are qualified and confident in your ability to make your payments each month, you should strongly consider privately refinancing your loans, potentially saving thousands of dollars in interest through the life of your loan.
Overall, the important lesson here is that the choice between privately refinancing federal loans or keeping them where they are is about more than just your ability to obtain a lower interest rate and better loan terms.
For those of us who have already finished our college and graduate school educations, refinancing student loan debt is a reaction to costly financial decisions already made.