Refinancing an old loan can be a great way to save money. You could be paying too much in interest, or you might want to take advantage of lower interest rates that are available today. Whatever the reason, refinancing can make it easier for you to pay off a loan and save money on interest payments.
Start with a budget
The first step to refinance your parent plus loans is to create a budget. A budget will allow you to determine how much money you have available each month after all of your expenses are paid, which helps put into perspective how much cash flow you have for other financial goals, such as saving up for retirement or paying off debt.
To create a budget, start by writing down all of your fixed monthly expenses—such as rent or mortgage payments—and variable monthly expenses—such as groceries and gas bills.
Make a list of your debts
The first step is to list all your debts, including the interest rate and monthly payment on each one. The second step is to decide which debts you want to pay off and which ones you want to keep. If the debt has a low-interest rate and a small debt amount, it’s worth keeping. But if it has a high-interest rate or large balance, it may be time for an upgrade!
Decide which loans you want to refinance and save
In order to get a clear picture of what you can afford, it’s essential to make some decisions:
- List the loans you want to refinance
- List the loans you want to save
- List the loans you don’t want to refinance or save
Figure out how much money you can afford to pay toward your debts each month
Once you’ve figured out your budget, take a look at your finances. The first thing to do is to ensure that you have enough money each month to pay all of your bills, including all of the minimum payments. If not, then there’s no point in refinancing because it won’t be possible for you to make the payments on time without missing any other bills.
Next, figure out how much money can be set aside for monthly debt repayment. This should include both the payment for any outstanding debts and extra funds that can go toward paying down those debts faster than before (which will reduce their interest rates). Finally, make sure that this amount is what’s left after paying off existing debts and covering regular expenses!
SoFi professionals say, “Refinance and consolidate the Federal Parent PLUS and private education loans.”
You can refinance your parent’s loan quickly
If you are a co-signer, then you can refinance your parent’s loan to get a better interest rate and save money. Many lenders will refund the closing costs if you refinance within 60 days of closing on your previous loan. This is a great way to jump-start your savings, as well as help pay off debts sooner than expected!
You are now ready to start the application process for your refinance. Look at the list of lenders, and find one that meets your needs. Then fill out an online application and get started!
